After a tumultuous year, ITV has returned to the black thanks to stringent cost controls which have delivered £169m of savings. Advertising revenues are also picking up, with interim chief executive John Cresswell forecasting a 7 per cent rise over the first quarter of 2010, accelerating to between 15 and 20 per cent growth in April.
However, Mr Cresswell cautions that these metrics will be against weak comparative figures, and he still remains cautious over the medium term. Chairman Archie Norman is not waiting around for cyclical upturns, though. He has already instigated a strategic review in advance of newly appointed chief executive Adam Crozier taking the reins on 26 April.
Operationally, advertising revenues slipped 9 per cent to £1.29bn last year, outperforming the market, which declined 11 per cent. ITV also grew market share to 44.7 per cent from 43.8 per cent. And tighter working capital management has driven debts down by £118m to £612m. The pensions deficit, at £436m, remains a concern although talks to use digital terrestrial TV multiplex operator SDN to provide asset backing to the pension scheme are ongoing.
Analysts at Credit Suisse expect the consensus adjusted 2010 EPS estimate of 2.5p will rise to 2.7p following these results.
ITV (ITV) | ||||
|---|---|---|---|---|
| ORD PRICE: | 57p | MARKET VALUE: | £2.1bn | |
| TOUCH: | 56.85-57p | 12-MONTH HIGH: | 60p | LOW: 16.5p |
| DIVIDEND YIELD: | nil | PE RATIO: | 25 | |
| NET ASSET VALUE: | 9p* | NET DEBT: | 177% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2005 | 2.20 | 0.31 | 5.4 | 3.12 |
| 2006 | 2.18 | 0.29 | 5.5 | 3.15 |
| 2007 | 2.08 | 0.19 | 3.5 | 3.15 |
| 2008 | 2.03 | -2.73 | -65.9 | 0.68 |
| 2009 | 1.88 | 0.03 | 2.3 | nil |
| % change | -7 | - | - | -100 |
*Includes intangible assets of £1bn, or 26p a share | ||||
