U.K.'s ITV 2013 Financials Rise Amid Growth at TV Production Arm

11:12 PM PST 02/25/2014 by Georg Szalai
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ITV CEO Adam Crozier

UPDATED: Adam Crozier, the CEO of the networks giant that airs "Downton Abbey" and "The X Factor" and that has continued to acquire TV production firms, ruled out a bid for U.K. broadcaster Channel 5.

LONDON – U.K. commercial TV network group ITV on Wednesday reported improved financials for the full year 2013, including its fourth year in a row of double-digit profit gains, amid continued growth at its TV production arm ITV Studios.

The company, which airs hit drama Downton Abbey and such shows as The X Factor on its flagship network, is led by CEO Adam Crozier who during a conference call Wednesday ruled out a bid for broadcaster Channel 5.

As reported, bid for the network are due on Thursday.

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The firm's ITV Studios content production arm continued to grow in 2013, boosting revenue 20 percent. The growth came due to four acquisitions and organic growth, the company said. Crozier emphasized during a conference call that the growth via acquisitions has come "on top of" solid gain at existing firms.

The ITV Studios unit brought in a 2013 operating profit of $222 million (£133 million), up from £107 million in 2012.

ITV said it expects "good growth" at ITV Studios in 2014, "and we will continue to look at potential acquisitions." Crozier during the call said the company is "happy" to look at all sorts of TV producers for a potential deal.

ITV overall posted an adjusted pre-tax profit of $969 million (£581 million) for 2013, up 27 percent from 2012. The figure excludes special items and impairment, among other things.

ITV's external revenue for 2013 rose 9 percent, with total revenue up 8 percent to $3.34 billion (£2.75 billion).

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"ITV has taken another significant step forward," said Crozier. "All parts of the business are progressing well as we continue to rebalance ITV." He added: "On-screen, we've had our best year-on-year performance for 10 years with share of viewing for [the] ITV Family up 4 percent driven by our continued investment in our high-quality schedules."

Crozier on Wednesday also summarized ITV's financial and strategic position four years into his five-year transformation plan by saying: "ITV is now demonstrably a much stronger company both operationally and financially."

Based on the strong performance, ITV unveiled a special dividend of $268 million (£161 million), in line with a year-ago payout to investors.

Crozier was also asked about retransmission fees on Wednesday, saying ITV has started conversations about them with all major stakeholders.

Looking at 2014, the ITV CEO said: "We again expect all parts of the business to see further growth. In ITV Studios, we anticipate good growth, primarily driven by the acquisitions we have made in the U.K. and internationally. In broadcast, we have started the year with the announcement of two new channels – [drama network] ITV Encore and [female-skewing] ITVBe - and we expect to see double digit growth from online, pay and interactive."

And Crozier said ITV would again outperform the U.K. ad market. "The television advertising market continues to show signs of improvement, with ITV Family [ad revenue] expected to be up 5 percent-6 percent over the four months to the end of April, and we expect to outperform our estimate of the television advertising market over the full year," he said.

E-mail: Georg.Szalai@THR.com
Twitter: @georgszalai

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