ITV profit boosted by shift from advertising
LONDON (Reuters) - ITV (ITV.L), Britain's biggest free-to-air commercial broadcaster, said in-house productions helped deliver a better-than-expected 13 percent rise in full-year earnings against a flat backdrop for advertising sales.
ITV, home to period drama Downton Abbey, soap opera Emmerdale and ice-skating show Dancing on Ice, reported adjusted earnings of 462 million pounds on external revenue up 4 percent to 2.14 billion pounds.
Chief Executive Adam Crozier is reducing ITV's dependence on revenue from the struggling advertising market.
"The increase in non-advertising revenues of 93 million pounds, driven by our studios and online businesses, is clear evidence of progress in rebalancing the company and our ability to grow new revenue streams," he said on Wednesday.
Shares in ITV, which had a strong run into the results, were up 8.2 percent by 9:59 a.m., the top FTSE 100 .FTSE riser, after the results comfortably beat market expectations and first-quarter advertising was better than expected.
Numis said the "very strong" results were well ahead of consensus expectations, upgrading to "buy" from "add".
"As has been widely trailed, advertising in Q1 has not been as bad as feared and given the upside from Euro 2012 in the second quarter we now forecast 2012 NAR (network advertising revenue) will be up 2 percent rather than flat," they said.
Crozier said 2012 ad sales had started better than expected, with the first-quarter down 2 percent against analyst forecasts of down 9-10 percent, he said. April would be broadly flat.
"There is some late money around on things like newspapers with the launch of the Sun on Sunday and reactions from one or two of the other newspapers as well," he said.
Crozier did not predict any upturn in the market, but said ITV would outperform. "We remain cautious -- it's been relatively flat, but we've got Euro 2012 coming up," he said.
ITV Studios, its production arm, was delivering success in drama, Crozier said, naming "Prime Suspect" in the United States and "Titanic", which will air in the spring on the centenary of the shipping disaster and had already been sold to 86 countries.
The early years of the twentieth century will also be the focus for a new drama "Mr Selfridge" about the life and times of U.S. tycoon Harry Gordon Selfridge, he said.
The company's total share of viewing rose 1 percent, but Crozier said he was "slightly disappointed" with the performance of its main channel, ITV1, which posted a 2 percent drop.
Audiences fell for ratings juggernaut X-Factor and for soap opera Coronation Street, he said, while snow had driven viewers to regional news a year earlier. "The Champions League draw wasn't quite as brilliant either."
Online revenue, which Crozier has identified as another growth engine, rose 21 percent to 34 million pounds from a low base.
The broadcaster has been late to develop both online and pay services, but it was working to fix that, with the launch of its Pay Player later in 2012, it said.
It is paying a total dividend of 1.6 pence a share, against no payout a year ago.
(Editing by Rhys Jones and Helen Massy-Beresford)
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