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ITV profits up as ad revenues slump

09/08/2006

ITV has reported a 12 per cent increase in half-year profits, despite falling advertising revenues.

The UK's largest commercial broadcaster said pre-tax profits for the six months to June 30th climbed to £173 million, up from £154 million on the same period last year.

But the company's total net advertising revenue fell by four per cent over the period, with revenues at the broadcaster's flagship station ITV1 dropping by eight per cent.

The channel continues to provide about 90 per cent of ITV's total take from advertising despite the launch of a number of digital channels by the group.

ITV expects ad revenues to fall 14 per cent during the third quarter, although the company claims that it had been hit by an overall weakening in the advertising market and constraints on pricing under the terms of a complex contract rights renewal scheme, which ties advertising rates to audience figures.

The broadcaster has struggled with declining viewing figures in recent months, and said that it was consulting with regulators over a review of the pricing structure, which was negotiated by departing chief executive Charles Allen.

Mr Allen, who yesterday announced that he was leaving the broadcaster amid reports of pressure for his resignation from investors, stressed that today's reported increase in profits vindicated the company's decision to focus on the development of digital channels.

"Despite a tough display advertising market, these results show that our strategy for developing our businesses outside ITV1 is delivering and they continue to grow at an impressive rate," said Mr Allen.

He added that the company remained focused on "revitalising" the ITV1 schedule performance, stressing that the channel's autumn and winter schedules were "looking strong".

"We also continue to invest in ITV's digital future with the development of ITV local and broadband in addition to our successful family of channels," Mr Allen concluded.

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