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UK broadcaster ITV said that pre-tax profits dropped by about two-thirds last year following a steep decline in traditional advertising revenues and set out plans to cut costs further.
Profit before tax fell to £193mn in the 12 months to December, from £501mn the year before, ITV said on Thursday. Revenues dropped 2 per cent to £4.3bn, as “result of the impact of the challenging advertising market” alongside investment in its streaming services.
Carolyn McCall, ITV chief executive, said that the group was in the “early stages” of a new strategic restructuring and efficiency programme that would cut costs further and aim to boost profitability.
An existing cost saving programme targeting £150mn between 2019 and 2026 will be delivered a year early, she said. The broadcaster has already frozen hiring and clamped down on expenses.
ITV has been hit by lower spending by advertisers on linear TV channels, and has set out plans to reposition that group to focus on its growing digital streaming services, as well as expanding its global studios division.
ITV’s studios business — which produces TV shows for its own channels and sells them to broadcasters around the world such as Mr Bates vs The Post Office, ITV’s biggest new drama in more than a decade — increased revenue by 4 per cent to £2.2bn last year.
The ITVX streaming platform helped boost digital revenues by 19 per cent. Total advertising revenue (TAR) — combining both linear and digital channels — was 8 per cent lower for the full year.
The UK broadcaster flagged a better start to this quarter, however. Total advertising revenue was expected to be up about 3 per cent, it said, with continued strong growth in digital advertising revenues.
Shares rose by more than 6 per cent in morning trading on Thursday.
Executives at the media group expect that key events that tend to attract advertisers, such as the Uefa Euro football tournament, will also boost revenues during the rest of the year.
McCall said that the group had “made great progress” towards its financial targets for 2026. The company said ITV Studios was on track to deliver total organic revenue growth of 5 per cent on average per year from 2021 to 2026.
However, McCall added that 2024 would be hit by the US writers and actors strikes last year, which will delay about £80mn of revenue, as well as weaker demand from free-to-air broadcasters in Europe “who are holding back spend until they see more certainty in the advertising market”.
ITV last week sold its 50 per cent stake in BritBox International, a subscription streaming service that broadcasts shows such as Death in Paradise in the US, to BBC Studios for £255mn. Proceeds of the deal will be distributed to investors through a share buyback.
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