ITV drives profits by investing in content creation and acquiring production assets

Press Release   •   Jul 30, 2013 11:03 BST

ITV, owner of the UK's biggest commercial TV station, rose the most in eight months after first-half earnings increased as the company focused on creating content and bought production assets.

The broadcaster reported a better-than-expected 16 percent rise in first half adjusted pre-tax profits to £270m, with adjusted earnings per share up 15 percent to 5.3p.

This came despite an expected fall in advertising revenues, as significant growth in online, pay & interactive and ITV Studios drove non-advertising revenues up 11 percent to £568m.

Online and interactive revenue rose by almost 20 percent reaching £56m and it expects this area to deliver double digit revenue growth for the full year, having also recorded a 17 percent increase in long form video requests through the broadcaster's digital platforms.

ITV, whose shows include "Downton Abbey" and "X Factor," has been reducing its dependence on advertising by investing in content creation and acquiring production assets.

It is facing an easy comparative against a year ago, when advertisers were diverted by the London Olympics, plus there has been a recent pick-up in advertising, helped by competition between BSkyB and BT in sports television.

Adam Crozier CEO of ITV said: "In the first six months of the year ITV continued to increase group profits and revenues despite the expected fall in our H1 advertising revenues.

"Non-advertising revenues were up by 11 per cent to £568m, driven by significant growth in Online, Pay & Interactive and in ITV Studios."

Follow us on Twitter @CandMResearch issues news updates and report summaries covering all major industries and sectors. The service provides additional client monitoring and timely alerts to breaking industry and sector news leading the day's business headlines. News articles, written by our staff, contain additional analyst insight, providing value added insight for our readers. News updates and real-time alerts on newly-released market reports are also available from our Facebook page, Twitter feed @CandMResearch and RSS links. We also welcome inquiries from business journalists and the news media.