Broadcasters have scrambled to follow audiences onto laptops and tablets and fend off online competitors such as Netflix and Amazon Instant Video. ITV (ITV) has been among the most successful: strong demand for original, on-demand and pay-TV programming, combined with a robust advertising market, drove the Downton Abbey broadcaster's adjusted cash profit up 18 per cent to £865m in 2015. Management also surprised investors with a special dividend of £400m.
ITV's net advertising sales rose 6 per cent, but the real stars were the studio arm and the smaller online, pay and interactive segment. Organic production revenue climbed 8 per cent as shows such as Thunderbirds are Go! took off. Meanwhile, digital and pay-TV turnover soared 23 per cent as consumers flocked to ITV Hub, a new platform for both live and catch-up television. But underperforming factual shows and fierce competition from the BBC and new digital channels eroded the audience share of the group's main channels by 3 per cent to 21.2 per cent.
Management also went on a shopping spree. It shelled out £406m to acquire The Voice creator Talpa Media, factual entertainment and drama producer Twofour and Mammoth Screen, the producer of premium dramas Poldark and Endeavour. And it recently completed the £100m takeover of Irish peer UTV's television assets.
ITV's directors expect Euro 2016 and a strong content slate to help the group outperform the TV advertising market in 2016. They also expect double-digit sales growth in the production and online segments. Broker Numis raised its forecasts and now expects adjusted pre-tax profit of £930m in 2016, giving EPS of 17.7p (from £842m and 16.5p in 2015).
ITV (ITV) | ||||
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ORD PRICE: | 242p | MARKET VALUE: | £9.7bn | |
TOUCH: | 242.2-242.4p | 12-MONTH HIGH: | 282p | LOW: 216p |
DIVIDEND YIELD: | 2.5% | PE RATIO: | 20 | |
NET ASSET VALUE: | 28p* | NET DEBT: | 28% |
Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p)† |
---|---|---|---|---|
2011 | 2.14 | 327 | 6.4 | 1.6 |
2012 | 2.20 | 334 | 6.6 | 2.6 |
2013 | 2.39 | 435 | 8.3 | 3.5 |
2014 | 2.59 | 605 | 11.6 | 4.7 |
2015 | 2.97 | 641 | 12.4 | 6.0 |
% change | +15 | +6 | +7 | +28 |
Ex-div: 28 Apr Payment: 27 May *Includes intangible assets of £1.5bn, or 37p a share †Excludes special dividends of 4p a share in 2012 and 2013, 6.25p in 2014 and 10p in 2015 |