ITV has posted an adjusted pre-tax profit fall of 41 per cent to £167 million and is retrenching to focus on its core business.
The broadcaster reported a fall in net advertising revenues of four per cent in its annual results and said that the fall was offset by external content revenues.
The company is predicting that total net advertising revenues for the first quarter of this year will be down 17m per cent year-on-year, in line with the total market. It believes that trading in April will outperform the market, which is forecast to be down 20 per cent
ITV’s share of net advertising revenues was 43.8 per cent last year, compared to 43.6 per cent the previous year.
ITV’s share of commercial impacts has held relatively steady at 41 per cent and its ITV1 adult impacts are only down one per cent on 2007. The broadcaster has a target of retaining a share of commercial impacts of at least 38.5 per cent to 2012.
Executive chairman Michael Grade has torn up the 2012 revenue targets set in 2007 and pledged to deliver annual cost savings of £155 million this year rising to 175 million next year and £245 million in 2011.
The company has had to write down the value of its broadcasting and online assets and the Board has recommended suspending the final divided.
Grade (pictured) says: “Current conditions in the advertising market are the most challenging I have experienced in over 30 years in UK broadcasting.
“Our priorities have to be aligned to the changed economic context. The Board therefore recognises that the 2012 revenue targets set in 2007 are no longer appropriate and we are focusing on our core businesses as a producer, broadcaster, on reducing our costs and on cash generation.”
Programming investment will be cut by £65 million this year and held flat next year, to be reduced by another £70 million in 2011.
Today’s statement says: “The programming mix is being shifted towards entertainment, a genre which ahs always been the cornerstone of the ITV schedule.”
ITV Local is to close as a standalone business and the broadcaster will look to sell off Friends Reunited and Scoot. It is also considering the options for its digital terrestrial multiplex business SDN.