ITV has reported an almost 8 per cent year-on-year fall in pre-tax profits to £167 million in the first half of 2012, and confirmed fears of a declining UK TV ad market with September revenues forecast to be down as much as 5 per cent.
However, the UK commercial broadcaster’s share price rose 8 per cent as the City shrugged off the disappointing advertising forecast and reacted positively to a strong performance from ITV Studios.
The ITV production business reported revenues up 34 per cent year-on-year to £355 million for the six months to the end of June. Profits at the division, which makes shows such as Come Dine with Me, were up 32 per cent year-on-year to £50 million.
ITV said that its total pre-tax profits were adversely affected by a £275 million bond buyback in June. Stripping this out ITV said that profits before tax were up 15 per cent year-on-year to £235 million and earnings before exceptional items climbed 10 per cent to £265 million. Total revenues were up 11 per cent year-on-year to £1.28 billion.
The broadcaster said the summer slump in TV advertising had deepened and looked set to extend to September.
ITV said that TV ad revenues fell 10 per cent year-on-year in July, August would be down 11 per cent and September was forecast to be somewhere between flat and 5 per cent down.
After a strong first half of the year, fuelled by spending around the diamond jubilee and Euro 2012, ITV is now saying that the slump means TV ad spend will be flat across the nine months tot the end of September. ITV is now relying on a rally in spending by advertisers in the final quarter, traditionally the biggest spending months of the year, to increase TV ad revenue year-on-year.
Adam Crozier, ITV Chief Executive, said that online, ITV had performed well with long form video requests up 20 per cent and further improvements in the reliability and distribution of ITV Player. “Our pay and online strategy has made good progress with the launch of our archive pay deals and YouView, and is soon to take another step forward with the roll out of ITV Pay Player,” he added.