17th May 2007 07:01
ITV PLC17 May 2007 ITV plc AGM Statement 17 May 2007 Stabilising the core business and investing for growth The clear imperatives for management are to improve the performance of the ITV1schedule and explore the opportunities that exist for the business, whileaddressing some of the regulatory constraints. The progress we have made todate is encouraging, the rate of decline of ITV1 SOCI is stabilising and ourdigital channels continue to perform well. The total TV advertising market isless volatile than last year. We are also creating opportunities to increasedistribution of ITV's valuable content both online and on digital broadcastplatforms. We are currently engaged in a wider review of the allocation ofresource within the Company to maximise future growth prospects in the mediumterm. We will update the market on this review by the Autumn. In March of this year, we were the first company to introduce an independentreview of our premium rate telephone services (PRTS) so that we could ensurefair and transparent interactions. All our current programmes have been cleared. However, the poor execution of these services across the sector has reducedconsumer confidence and is having a material impact on PRTS revenues. ITV iscommitted to publishing the findings of the current independent review of PRTSin ITV programming. Advertising revenue In the first quarter of 2007 we identified that total UK television advertisingrevenue had stabilised, and this trend has continued. Total UK televisionadvertising for the six months to June is flat compared to the same period lastyear. ITV1, affected by the contract rights renewal (CRR) remedy, is down by9.6% over the first half of 2007, whilst ITV plc total advertising revenue isdown by 5.7%. Channel ratings and production Over the first 17 weeks of 2007 to 29 April, the ITV family of channels(including GMTV) achieved a viewing share in multichannel homes of 21.9% whichwas slightly ahead of the same period in 2006. In all homes the continuing,rapid take-up of digital multichannel television resulted in the ITV1 adultshare of commercial impacts (SOCI) being 6.2% down at 32.6% over that period,whilst the corresponding period in 2006 had been down 10% on 2005. The growthin SOCI of our digital channels over the first 17 weeks of 2007 was 18% and theITV family of channels overall was down 3.8% at 41.7%. In our US production business we are delighted to have agreed the acquisitionfor £2.9 million of a 51% controlling interest in Jaffe/Braunstein EntertainmentLLC, a highly respected and critically acclaimed Los Angeles-based producer ofscripted telefilms and mini-series. In early 2007 we concluded that the level of revenue being generated by our ITVPlay channel did not merit its continued operation. We therefore decided toclose the channel whilst continuing with ITV Play programming during the nighton ITV1 and ITV2. Immediately following concerns being expressed about UKtelevision quizzes and game shows incorporating premium rate telephone services(PRTS), we announced on 5 March that we were reviewing all of our activity toensure that ITV delivered quizzes and game shows in a fair and transparentmanner for our viewers' enjoyment. That review has now cleared all our currentoutput and we have strengthened our procedures to comply with or exceed theprovisions of the code issued by the premium rate telephony regulator, ICSTIS. The level of revenue now being generated by ITV Play is running at a significantreduction to 2006. Other PRTS revenue is down by approximately 20% in March andApril and concerns remain about when consumer confidence in this area will berestored. Carlton Screen Advertising (CSA), our cinema advertising business, has had aslow start to the year and we expect CSA to be in loss again this year. ITV.com On May 1 we held a press launch for our new broadband offering, ITV.com, whichwe are confident will be the most comprehensive web site offered by any UKcommercial broadcaster. ITV.com will provide an attractive free service toconsumers and compelling online opportunities for our advertisers. ITV.comlaunches to consumers this summer and will offer live streaming of ITV'schannels, a 30 day catch-up service and a 'best of ITV' archive. Our regionalbroadband TV service, ITV Local, has been extended to the London and Centralregions and now covers 45% of the UK population. Freesat In April ITV announced that it would be establishing a joint venture companywith the BBC to launch a Freesat service in Spring 2008. Freesat willcomplement Freeview in driving the take-up of free-to-air digital services. Regulatory issues On 27 April both the Office of Fair Trading (OFT) and Ofcom announced theirreports on the purchase by BSkyB in November 2006 of a 17.9% shareholding in ITVplc. Those reports identified issues which both regulatory bodies considershould be reviewed further and a decision on a potential reference by theSecretary of State at the Department of Trade and Industry to the CompetitionCommission on public interest grounds is expected by 26 May. ITV willco-operate fully in any regulatory process. Michael Grade, Executive Chairman of ITV plc, said: "I'm encouraged by the progress we've made so far this year, but there is stilla great deal more to do. We are taking steps to stabilise our core business andensure future growth by reviewing the best allocation of our current resources. "In recent months we have managed to slow the rate of decline in SOCI andviewing share on ITV1 as we begin to see new programming from our commissioningteam delivered on-screen. In addition, we've made some key acquisitions tostrengthen our schedules, such as the FA Cup and England rights from 2008,secured long-term deals with major talent such as Ant and Dec and Simon Cowell,and are extending our contract with ITN for news. The relaunch of ITV.com willhelp to ensure that ITV continues to grow its share of increasing onlinerevenues. "The Board takes the PRTS issues very seriously and is committed to publishingthe findings of the current independent review of PRTS in ITV programming. "Encouragingly the airtime sales market appears less volatile than last year,and we remain firmly focused on the needs of our viewers and advertisers. Ourgoal is to create long-term value for our shareholders by exploiting our contenton an expanding number of media platforms, both in the UK and internationally." Ends. For further information please contact: ITV plcTel: 020 7843 8000 Press enquiriesBrigitte Trafford Group Communications DirectorJim Godfrey Director of Corporate Affairs Analysts' enquiriesJames Tibbitts Company SecretaryGeorgina Blackburn Head of Investor Relations Tulchan Communications GroupTel: 020 7353 4200 Andrew GrantSusanna Voyle This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
ITV