ITV profit dips in first half
EmptyLONDON -- ITV executive chairman Michael Grade on Wednesday pledged to update the market after "a detailed business review" of the U.K. commercial broadcaster in September.
Grade's pledge came as the U.K.'s largest commercial network posted a downturn in first-half profits for 2007, a smaller drop than previously expected, according to analysts.
The free-to-air broadcaster also noted the first quarterly increase in net advertising revenue for its main ITV1 channel in more than two years, heralding it as a signal of the road to recovery.
The company also put a figure on the cost of the call-TV scandal that has slammed broadcasters here.
ITV said it saw a £21 million ($42 million) drop in revenue from call television and premium-rate telephone services over the period, "reflecting editorial and compliance failures" that have blighted the television industry here in recent months.
Grade said that consumer confidence in interactive phone-in television services has been "severely dented" and will not be restored until companies take appropriate action, adding that he was convinced interactive television services will ultimately flourish given strong consumer interest.
A review of ITV's interactive phone-related services being carried out by auditors Deloitte should be published in October, ITV said.
Grade told the stock market he was "very pleased with progress in ITV1's schedule performance and the outlook for revenue in Q3 is encouraging."
He noted that, in the first six months of 2007, ratings declines slowed and the advertising market remained essentially flat.
Finance director and chief operating officer John Cresswell said that estimated advertising revenue in the third quarter was up 1% year to year for ITV1 and up 4% across all ITV channels. ITV1's net advertising revenue has not been positive since the first quarter of 2005.
ITV earnings before interest, tax and amortization in the six months through June 31 fell to £151 million ($302 million) from £202 million during the same period last year.
First-half revenue fell slightly to £1.004 billion ($2 billion) from £1.007 billion in the first six months of 2006. The fall reflects a 5% decline in net advertising revenue to £717 million ($1.4 billion), with lower ITV1 and GMTV NAR partly offset by rises across digital channels.
"Our family of digital channels continues to grow, increasing revenue and viewers, and the launch of ITV.com has opened a valuable opportunity for us to compete effectively for online revenues for the first time," Grade said.
ITV said that Internet advertising, particularly search-related, has been growing strongly and, as broadband adoption in the U.K. increases, it expects to see further Internet video advertising growth.
Reuters contributed to this report.