Joseph O'Halloran ©RapidTVNews | 27-07-2011
Even though it posted a respectable 4% yearly rise in revenues, past the £1bn mark, ITV plc has urged caution as regards long term prospects for both itself and the broadcasting industry.
Indeed it said that it feels encouraged by our progress to date and the prospects for ITV in the medium to long term but remained cautious about the advertising market and the economy. That said, CEO Adam Crozier was emboldened enough to announce the launch of a new micro payment to take advantage of the strongly performing digital channels.
A year into its Transformation Plan, interim results for the half year ended 30th June 2011 showed total external revenues of £1.027 billion and EBITA before exceptional items of £240m, a year on year increase of 45%. This was made possible with the conversion of higher revenues into profit and the absence of Football World Cup costs from summer 2010. Cost savings are on track to effectively deliver £15 million to the business by the end of 2011.
Looking at divisional performance, ITV Studios increased external revenues by 11% year on year to £140 million driven by strong international revenue. However its EBITA dipped as a result of increasing talent costs and rising outlay on developing and piloting new programmes.
In terms of advertising performance, the ITV Family NAR was up 2%, a percentage point below the overall TV advertising market. ITV Family SOV was up 2% yet flagship ITV1 sales were flat even though this compared well with 2010 which showed a 5% fall.
ITV digital channels performed strongly with ad revenues up by up 11%. Aiding this was the launch of the ITV Player on Android phones, iPhone, iPad and Freesat. The player was used for 180 million long form video views, a year on year increase of 64%.
Crozier regarded the results as evidence that ITV was making good progress on delivering our strategy of creating compelling content and exploiting it across multiple platforms and selling it internationally.
He said: “As today’s results show, our focus on costs, cash generation and improving the efficiency of our balance sheet gives us an increasingly strong financial base from which to drive our strategy forward. Despite the difficult economic backdrop and the absence of the Football World Cup, our advertising revenues increased by 2% and, while we continue to plan prudently, we expect to outperform the TV advertising market across the whole of the year.”
The new micro pay mechanism will likely be in place around the turn of the year so that it could test what viewers were willing to pay for. He also confirmed ITV’s commitment to the much vaunted yet much delayed YouView subscription-free HD on demand project, which is on track for launch in early 2012.