A potent mix of foreign acquisitions, an improved advertising market and the FIFA World Cup drove a 13 per cent rise in ITV ’s operating profit to £287m. But it wasn’t a clean sweep for the broadcaster, as its fledgling production business put in a weak performance.
Rising net advertising revenues from ITV’s family of channels, which includes ITV and CITV, helped sales at its main broadcast and online segment rise 7 per cent to £981m. The group’s online, pay and interactive segment also grew sales by a fifth amid soaring interest in on-demand video. The studios division trailed the pack with an 8 per cent organic sales decline, reflecting the phasing of programme delivery and the programming costs of the World Cup.
ITV also bought a majority stake in ‘Pawn Stars’ owner Leftfield Entertainment, its fifth acquisition in 3 years in the enormous US market. But the downside of international expansion is currency exposure - that could depress ITV’s full-year sales by £25-30m and reduce its after-depreciation cash profits by £6-8m.
US cable giant Liberty Global’s recent purchase of a small stake in ITV adds ‘speculative spice’ to its shares, according to broker Numis. Following these results, it expects to upgrade its EPS forecast by 3 per cent to 13p (11.2p in 2013).
ITV (ITV) | ||||
---|---|---|---|---|
ORD PRICE: | 204p | MARKET VALUE: | £8.2bn | |
TOUCH: | 203-204p | 12-MONTH HIGH: | 210p | LOW: 153p |
DIVIDEND YIELD: | 1.9%† | PE RATIO: | 21 | |
NET ASSET VALUE: | 18p* | NET DEBT: | 25% |
Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2013 | 1.14 | 179 | 3.4 | 1.1 |
2014 | 1.23 | 250 | 4.9 | 1.4 |
% change | +7 | +40 | +44 | +27 |
Ex-div:29 Oct Payment:01 Dec *Includes intangible assets of £1.2bn, or 29p a share †Excludes special dividend of 4p in 2013 |