Advertising lift turns ITV's fortunes

THERE may be light at the end of the tunnel for ITV this week in gradually improving advertising markets but the broadcaster is at a crossroads as a revamped board plots a new direction for the business.

After a year of turmoil at the top, the firm is led by a new chairman, former Asda boss Archie Norman, and awaits the arrival of Royal Mail chief executive Adam Crozier on a 15 million five-year deal to change ITV's fortunes.

Annual results on Wednesday will be too soon for a strategic update as Crozier is yet to arrive, although the group should be on course for a return to profit after a 2.7 billion loss in 2008 – a reverse caused by writedowns in a brutal advertising climate.

Consensus forecasts predict pre-tax profits of 88m on revenues of 1.86bn for 2009.

Housebuilder Taylor Wimpey was forced to rebuild its battered finances last year after a disastrously-timed merger but started 2010 on the front foot after a 62 per cent rise in sale reservations.

A pre-close update last month showed the group's UK order book for private house sales stood at 3,048 homes, compared with 1,887 at the start of 2009.

The company said market conditions were "stable" although concerns linger over economic prospects and the impact of reduced mortgage availability.

Annual results due on Wednesday should make slightly less grim reading than a year ago, when it unveiled eye-watering pre-tax losses of 1.97bn for 2008 due to huge write-downs on its landbank and goodwill on the merger.

Cazenove analyst Jeremy Withersgreen predicts a 145m loss for 2009 with the group not returning to profit until 2011.

Charles Church builder Persimmon, which also reported a solid start to the year with a 40 per cent rise in forward sales on a year earlier, posts its own annual results on Tuesday.

Royal Bank of Scotland analyst William Jones – who expects a 76 per cent fall in underlying profits to 46.9m – said: "Under a flat house price scenario, the market may be underestimating both average landbank profitability and cash generation potential in 2010-11."