ITV profits up 42%

Broadcasting group ITV posted a 42% increase in half-year profits today after seeing advertising revenues jump to their best level since the dotcom boom.

The group – formed from the merger of Granada and Carlton earlier this year - said first-half advertising revenues from all ITV channels improved by 4.9% on 2003 and were estimated to be up 5.5% in the current quarter.

Chief executive Charles Allen said the newly-created company had delivered on all aspects of the merger, with cost savings achieved six months early.

He pledged to raise the target from £100m (€146.5m) a year to £120m (€175.8m) but did not provide details of how the extra savings would be achieved.

In today’s figures, covering the six months to June 30, ITV said operating profits rose 32% on a year earlier to £123m (€180.1m) while bottom-line pre-tax profits came in at £132m (€193.3m). The figures are on a pro-forma basis.

The company added that it had a strong autumn schedule in place, with stars including Martin Clunes and Ray Winstone among those set to feature. It will also launch ITV3, a new digital station to cater for the over-35 age group, on November 1.

The long-awaited tie-up between Carlton and Granada brought together all the former ITV regional companies, except Scottish, Grampian and Ulster.

As a result, ITV plc’s share of advertising revenues rose by 4% in the first half and in the quarter to the end of September is set to have risen by 5.2% on the same period a year earlier.

The company said ITV1 reported a 31.5% share of the peaktime schedule, although this was down 0.4% year-on-year as more viewers switched to Freeview multichannel services.

Under the terms of the merger, ITV plc agreed a sales system that links advertising rates to ITV1’s share of commercial impacts – one viewer watching a 30-second commercial.

The share was 41% in the first half, down from 42.7% across 2003, although the company pointed out it had planned an “extremely strong autumn schedule”.

Mr Allen said: “This is a good set of results and I’m delighted that ITV is delivering on all aspects of the merger with operating profits up 32%.”