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ITV shares surge to 12-year high on profit rise | ITV shares surge to 12-year high on profit rise |
(about 5 hours later) | |
Shares in broadcaster ITV hit a 12-year high after it posted a better-than-expected profit, helped by a strong performance from its production arm. | Shares in broadcaster ITV hit a 12-year high after it posted a better-than-expected profit, helped by a strong performance from its production arm. |
Adjusted pre-tax profits rose 16% to £270m in the six months to the end of June, with revenues at ITV's studios business up 11%, helped by the production of programmes such as Mr Selfridge and Marple. | Adjusted pre-tax profits rose 16% to £270m in the six months to the end of June, with revenues at ITV's studios business up 11%, helped by the production of programmes such as Mr Selfridge and Marple. |
The rise helped to offset a 3% drop in advertising sales. | The rise helped to offset a 3% drop in advertising sales. |
ITV said it had made "good progress". | ITV said it had made "good progress". |
"We're showing real momentum in our strategy of creating a robust international content business and in building substantial strength and scale in the US market," said chief executive Adam Crozier. | "We're showing real momentum in our strategy of creating a robust international content business and in building substantial strength and scale in the US market," said chief executive Adam Crozier. |
Mr Crozier's plan is to eventually achieve an equal split between advertising and production revenues to help protect it from the volatility of the advertising market. | Mr Crozier's plan is to eventually achieve an equal split between advertising and production revenues to help protect it from the volatility of the advertising market. |
As part of this strategy, ITV spent £53m on acquisitions during the six month period, snapping up US production firms Thinkfactory Media and High Noon and UK producer The Garden, maker of Channel 4 shows including 24 Hours in A&E and The Audience. | As part of this strategy, ITV spent £53m on acquisitions during the six month period, snapping up US production firms Thinkfactory Media and High Noon and UK producer The Garden, maker of Channel 4 shows including 24 Hours in A&E and The Audience. |
Looking up | Looking up |
However, despite the drop in advertising, ITV said it expected demand to bounce back strongly this summer. | However, despite the drop in advertising, ITV said it expected demand to bounce back strongly this summer. |
It expects advertising revenues to rise 12% in July, 20% in August and to be flat in September, compared with the same months in 2012, which would produce a broadly flat first nine months of the year. | It expects advertising revenues to rise 12% in July, 20% in August and to be flat in September, compared with the same months in 2012, which would produce a broadly flat first nine months of the year. |
Mr Crozier said last year's advertising was affected by the coverage of major sporting events. ITV showed the Euro 2012 soccer tournament last June, but suffered from having no coverage of the Olympics in July and August. | Mr Crozier said last year's advertising was affected by the coverage of major sporting events. ITV showed the Euro 2012 soccer tournament last June, but suffered from having no coverage of the Olympics in July and August. |
Mr Crozier said advertisers were becoming more confident about spending:" I think it would be fair to say the fear of the downside seems to have largely diluted and people are now looking more positively." | Mr Crozier said advertisers were becoming more confident about spending:" I think it would be fair to say the fear of the downside seems to have largely diluted and people are now looking more positively." |
Shares in ITV closed at a 12 year high of 167p, a rise of 6.3%. |
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