30th Jul 2014 07:45
LONDON (Alliance News) - ITV PLC Wednesday pledged to grow its full-year ordinary dividend by at least 20% per year over the next three years, starting from this year, as it saw pretax profit rise in the half year to end-June.
The broadcaster proposed an interim dividend of 1.4 pence, up from 1.1 pence, which it said would be roughly a third of its full-year dividend.
ITV posted a pretax profit of GBP250 million, up from GBP179 million, as total revenue rose to GBP1.23 billion from GBP1.14 billion.
The company saw external revenue up 7%, driven by 7% growth in net advertising revenue, and continued growth in non-net advertising revenues of 4%.
ITV's Broadcast and Online division saw revenue rise 7%, driven by 7% growth in ITV Family net advertising revenue, and 20% growth in Online, Pay & Interactive.
The company's on-screen performance was down in the first half, with viewing share dropping 3% and ITV Family viewing share down 5% due to a disappointing performance from ITV2 and ITV3.
On a call with journalists Wednesday morning Chief Executive Adam Crozier said the channels had been hit by the launch of its new ITV Encore channel, which had taken viewing share from the channels, as well as as the repositioning of ITV2 to skew to a younger audience, although Crozier said there was no one factor that had led to the disappointing performance.
The company expressed confidence in its Autumn programming schedule, citing new programmes 'Chasing Shadows', as well as the return of 'Downton Abbey' and 'The X Factor'.
Schedule costs were up as a result of the FIFA World Cup, ITV said, rising GBP40 million. Other costs also rose 3% due to marketing costs and investment in its online offerings.
In its ITV studios business, revenue rose 2%, although earnings before interest, tax, and amortisation for the segment rose 14%, benefiting from production efficiencies and higher margin revenue mix. Excluding acquisitions, revenue in its UK and International Productions businesses were down 8%, hit by the phasing of some programme deliveries and a proportion of its budget being allocate to the World Cup.
The company said it expects to see growth in the ITV Studios segment in 2014, driven by acquisitions. In 2015 it expects further growth from these acquisitions.
Looking forward, ITV said it expects to make total cost savings of GBP15 million for the full year, although this will be offset by investments of GBP15 million to GBP20 million, including costs for the launch of two new channels.
It expects is profit to cash conversion for the full year to be between 80% to 85% due to its additional investment in scripted content. ITV noted that if the sterling stays at its current strength, the full-year hit from exchange rates will be around GBP25 million to GBP30 million on revenue, and GBP6 million to GBP8 million on earnings.
The company expects to see all parts of its business to see grow over the full year as it enters the next phase of its growth strategy.
"We will continue to rebalance the business and grow new revenue streams, both organically and through acquisition. We see clear opportunities for growth across the business - in content, online, pay and advertising and there will be an increasing emphasis on international content creation and distribution," Crozier said in a statement.
Shares in ITV were trading down 0.8% at 203.40 pence early Wednesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
ITV