DCSIMG

ITV signals plan to boost dividend as profits climb

ITVs coverage of the World Cup boosted its UK viewers. Picture: AP

ITVs coverage of the World Cup boosted its UK viewers. Picture: AP

  • by DOMINIC JEFF
 

The football World Cup gave broadcaster ITV a kick that helped it post double-digit 
profit growth across all its 
business areas during the first half of the year.

Overall adjusted pre-tax profits came in at £312 million, up 16 per cent on a year earlier, and the firm said it would raise its dividend more than 20 per cent a year for the next three years.

Chief executive Adam Crozier said the football tournament in Brazil had helped reverse a decline in the company’s share of the UK audience seen in the first quarter.

“Share of viewing improved during the second quarter, helped by the Fifa World Cup, and we’re confident of our strong autumn schedule with both new and returning drama and entertainment,” he said.

He added: “The economic recovery is leading to an improved advertising market, with good growth across all key categories and ITV is well placed to take market share.”

The Coronation Street broadcaster recently caught the eye of tycoon John Malone’s pay-TV group Liberty Global, owner of Virgin Media, which bought a 6.4 per cent stake in ITV from rival Sky earlier his month.

ITV’s shares jumped after the purchase was made public, on speculation it could lead to a full takeover bid, although the American group said it did not intend to make an offer.

Crozier said he was not aware of Liberty’s ambitions and wouldn’t be distracted wondering about them.

“Liberty’s intentions are very much a matter for them,” he stressed. “We have a very clear strategy which is delivering excellent results. We are fully focused on delivering that plan.”

Crozier said ITV, which also includes a production arm, had delivered double-digit profit growth in every area of the business in the six months to the end of June.

The company posted first-half revenue of £1.23 billion, up 7 per cent. Net advertising revenue for the period also rose 7 per cent, and was expected to be up by between 4 per cent and 5 per cent in the third quarter across ITV’s family of channels.

Analysts at brokerage Jefferies, who have a “buy” rating on ITV, said the first-half numbers were somewhat overshadowed by Liberty Global’s activities.

But the broker said the group had nonetheless delivered a solid operational performance and was “in great shape”, with the dividend growth being popular with investors.

ITV said it would raise its first-half dividend 27 per cent to 1.4p per share.

Hargreaves Lansdown analyst Keith Bowman pointed out that alongside the football and the wider recovery, ITV’s push to embrace technology had boosted its online, pay and interactive businesses, while it also expanded its content production arm internationally.

But he noted: “On the downside, the group’s and the wider industry’s dependency on major sporting events is again being underlined, whilst any strategy utilising acquisitions is not without risk.”

 

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