Reporting its full-year results for the period ended December 31, 2016, ITV said this morning that its overall group revenue grew by 3% to £3.064B ($3.8B). With a 3% drop in net advertising revenue across 2016 — and amid an uncertain economic and political background as Brexit hovers — the UK’s largest commercial broadcaster predicts a 6% ad dip in the first four months of 2017. Still, ITV expects to outperform the market and reported a slight increase in pre-tax profits to £847M ($1.05B) from £843M ($1.04B).
Production business, ITV Studios, saw revenue jump by 13% to £1.395B ($1.7B) with EBITDA up 18% to £243M ($300.1M). There is further good organic revenue growth expected. ITV has been on an acquisitions spree for the past several years and just yesterday announced it had bought a majority stake in French production group Tetra Media Studio. Fifty percent of total revenues at ITV Studios came from outside the UK while the group delivered 7,800 hours of content to 234 channels and platforms in- and outside the UK including 155 hours of drama and 80 formats.
However, ITV America’s total revenue declined 27% to £235M ($291M) with organic revenue down 35%. The drop was predominantly driven by Texas Rising and Best Time Ever being cancelled, and the phasing of Hell’s Kitchen, which was not delivered in 2016, but will return for two cycles in 2017.
ITV chief Adam Crozier pointed to increased investment in U.S. scripted content including Somewhere Between, The Good Witch, Sun Records and a pilot for Snowpiercer, and said ITV Studios profits in 2017 “are likely to be broadly in line with 2016.”
On the broadcast side, viewing share was up 1% across all channels and 3% on flagship ITV1. Six Nations Rugby and the 2016 Euro Cup bolstered performance alongside drama including Victoria, Cold Feet, The Durrells and Marcella. On Monday, the return of Broadchurch gave the network its best drama ratings since Downton Abbey in 2015.
ITV will pay an unexpected special dividend of 20 pence a share, which Citi analysts say signals confidence in the future. The company has been the subject of takeover chatter ever since the UK voted to leave the European Union last June.
