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ITV pre-tax profits near £350m

ITV’s pre-tax profits grew 6% to £348m in 2012 after the company recorded impressive jumps in digital and production revenues.

The UK’s biggest free-to-air commercial broadcaster’s total external revenues hit £2.2bn for the 12 months to 31 December, an increase of 3% on the £2.14bn generated in 2011. Earnings before interest, tax and amortisation rose more than 11% to £520m.

Nearly half of ITV’s turnover - £1.04bn - was from sources other than traditional spot advertising. This was an increase of 12% on 2011, when income from ITV Studios and other areas of the business reached £922m.

ITV’s total revenues grew 4.5% to £2.54bn, including the £350m ITVS made from producing shows for the company’s own channels.

ITVS performance

Revenues at ITVS, which produced shows including Mr Selfridge and I’m a Celebrity…Get Me Out of Here! last year, increased £100m, or 16%, to £712m last year.

Some £408m of this total figure came from UK productions, while the business’ international programme-making revenues rose £30m to £171m year on year.

The production arm’s adjusted EBITA increased from £83m to £107m over the accounting period - the first time it has topped £100m in the company’s history. It won 100 new orders in 2012, while recommissions grew from 101 to 108.

Digital growth

Meanwhile, the broadcaster’s online, pay and interactive revenues rocketed from £81m in 2011 to £102m last year, fuelled by a 22% rise in long form video requests on ITV Player, which hit 458m over the 12 month period.

ITV pointed out that the digital segment of the business now accounts for 10% of the company’s non-advertising revenues.

The commercial broadcaster posted net advertising revenue of £1.51bn last year, identical to its 2011 sales. It acknowledged the advertising market was “broadly flat” in 2012 but the company expects ad sales to be up 5% in the first quarter of this year.

Crozier comments

Chief executive Adam Crozier said there was no hangover from last year when the broadcaster’s share of viewing across its four channels fell 3% against the “unprecedented” backdrop of the Diamond Jubilee and Olympics.

ITV is nearly three years into Crozier’s five-year transformation project to reduce the broadcaster’s reliance on advertising and he said there is “clear evidence” that it is transforming into a “more robust, efficient and balanced” company.

“This encouraging progress has been driven by a strong performance in broadcast, increasing strength in online, pay and interactive, and a real step change in the creative capability and output of our ITV Studios content business,” he said.

ITV delivered £30m of cost savings in 2012, which was £10m ahead of its original target, and has identified another £20m of costs that can be stripped out of the business in 2013. Meanwhile, its programming budget for this year has been set at £980m.

ITV’s share price was up 2.06p or 1.71%, 121.3p, in the first two hours of trading. This is a substantial increase on the 56p share price when Crozier took over in 2010.

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