Grade talks up ITV despite profits slump
EmptyLONDON -- ITV executive chairman Michael Grade talked up the commercial broadcaster's audience and ratings revival Wednesday, as it announced revenue down 5% to 2.18 billion pounds ($4.3 billion) in the 12 months to Dec. 31 on pretax profits 35% lower at 188 million pounds ($372 million).
Net profits declined to 138 million pounds ($273 million) and operating earnings before interest, tax, depreciation and amortization were down 17% to 311 million pounds ($615.2 million). Three-month figures were not released.
Grade said that despite the share price and the lowered financial results, the turnaround plan he unveiled last summer was "on track" to transform the business over the next three to five years.
Grade said that the total audience share for ITV's family of channels including core network ITV1 and digital webs ITV2, ITV3 and ITV4, had increased for the first time since the late nineties, rising from 23.1% in 2006 to 23.2% in 2007.
"Viewers are coming back to ITV and advertisers are following them," he said on a conference call Wednesday morning. "People who had deserted ITV are coming back, viewing share is coming back. Don't forget that we are outperforming our rivals," he pointed out.
ITV1's core audience share was down 2.1% compared to double-digit falls for commercial rivals Channel 4 and Five.
Grade said that ITV was embarked upon a turnaround plan that would take three to five years to deliver, but that the broadcaster had the confidence of shareholders.
"The share price is the share price is the share price; I can't worry about it presently. We have the confidence of our shareholders and the numbers will follow," he said.
ITV's shares have fallen to an all time low of 0.62 pounds ($1.23) earlier this week but were up at 0.67 pounds ($1.33) in early trading Wednesday.
"Our targets are clear, the timeline is clear, this is a three to five year plan for a business that has been languishing in recent years. You see some implementation risk in it -- but the plan is well supported by shareholders and we have a fantastic team. If we keep delivering on screen the plan will come together," said Grade.
Grade pointed out that the "overhang" effect of the current economic gloom and anticipated sale of BSkyB's 17.9% stake in the business was also putting pressure on shares.
"Most European media stocks are out of favor, plus up to 17.9% of the stock is on the block, but three of our leading shareholders are actually buying new shares," he said.
ITV said that revenues over the 12-month period had been hit by a reduction in quiz-TV call revenues, which were down 58 million pounds ($114.7 million) and a slide in revenues of 37 million pounds ($73.2 million) from the content division.
ITV net advertising revenue (NAR) was flat at 1.49 billion pounds ($2.95 billion) while ITV digital channels NAR leapt 33% to 209 million pounds ($413.6 million) from 157 million pounds in 2006.
Grade said the recent announcement that Peter Fincham would replace outgoing director of television Simon Shaps, who announced his resignation last week, would continue ITV's program resurgence.
"We had a vacancy and Peter is the best man for the job. His track record at BBC1 was phenomenal and I would expect him to take Simon's legacy and move it on to the next level."
Grade said ITV would also deliver increased revenues by ramping up its in-house production division -- headed by Dawn Airey -- through new commissions and the acquisition of key production businesses.
"ITV Prods. will grow. We've made a couple of acquisitions including (U.K. production indie) 12 Yards, the U.S. business is going very well. Dawn's on track, she believes in it, she believes that she can meet it. We're also looking at international acquisitions, not just inside the U.K.," he said.