One year into chief executive Adam Crozier's five-year transformation plan and broadcaster ITV is already in better shape. Costs continue to be cut, borrowing is down, and the digital strategy is beginning to bear fruit. And while Mr Crozier warns that there is "still much to be done", he has also reinstated the half-year dividend.
Net advertising revenues (NAR) grew 2 per cent in the period, with first-quarter NAR rising 12 per cent. However, second-quarter advertising sales did contract by 6 per cent due to tougher comparatives from last year - when the outcome was buoyed by the football World Cup. As such, ITV's first-half NAR underperformed the market, which registered 3 per cent growth. However, ITV's full-year NAR is still expected to outperform the market. This remains achievable given that ITV's share of viewing has continued to grow and that its family of channels increased market share to 23.2 per cent from 22.7 per cent a year earlier.
Moreover, digital expansion has benefited from a £12m investment during the half. This has already started to make a difference, with online revenue up 33 per cent to £16m. A new homepage has been launched and ITV Player is now available on Android, Apple and Freesat. A further £13m will be invested into this space in the second half of the year.
Meanwhile, net debt fell to £52m from £188m a year earlier - ITV now has no major debt repayments due until 2014. Costs have continued to be cut, too, and the broadcaster is now on track to deliver an additional £15m of cost savings - on top of the £40m delivered last year. However, the pension deficit remains largely unchanged at £312m, with £48m of deficit funding offset by a £48m increase in net liabilities.
Broker Peel Hunt is expecting adjusted full-year pre-tax profit of £399.2m, giving adjusted EPS of 7.9p (from £333.9m and 6.4p in 2010).
ITV (ITV) | ||||
|---|---|---|---|---|
| ORD PRICE: | 67p | MARKET VALUE: | £2.61bn | |
| TOUCH: | 67-68p | 12-MONTH HIGH: | 96p | LOW: 50p |
| DIVIDEND YIELD: | 0.6% | PE RATIO: | 8 | |
| NET ASSET VALUE: | 19p* | NET DEBT: | 6.9% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 0.99 | 97 | 1.8 | nil |
| 2011 | 1.03 | 181 | 3.5 | 0.4 |
| % change | +14 | +87 | +94 | - |
Ex-div: 2 Nov Payment: 1 Dec *Includes intangible assets of £941m, or 24p a share | ||||
