Broadcasting giant ITV has posted a 6 per cent fall in profits after a “challenging” 2017, but said advertising sales are bouncing back thanks to a strong line-up including Dancing On Ice and the forthcoming Fifa World Cup.
The group reported underlying pre-tax profits of £800 million for last year, down from £847m in 2016, after advertising sales fell 5 per cent to £1.6bn, affected by the “uncertain economic environment”.
New boss Carolyn McCall - who took on the top job last month after seven years as chief executive of easyJet - praised a strong performance in difficult conditions and said a “strategic refresh” was under way.
She added that ITV had seen a “great start” to 2018 and the group is expecting advertising revenues to continue recovering in the first half, with growth of 1 per cent in the first quarter and growth in the second quarter, helped by the World Cup football tournament.
She said: “There is no doubt that ITV’s operational performance in 2017 in a challenging environment was strong.”
“We are very focused on our strategic refresh. This will enable us to define a clear strategy and priorities that will highlight the opportunities and address the challenges that we face in an increasingly competitive media landscape. This project is well under way.”
Ms McCall will report back on the strategy overhaul at the firm’s interim results.
ITV’s profits fall for 2017 confirmed the hit to the group from Brexit uncertainty as advertisers reined in their spending.
On a bottom-line basis, pre-tax profits fell 10 per cent to £500m.
The group said: “ITV took action early to reduce overhead costs but the uncertainty has undoubtedly had an impact on the demand for television advertising and therefore as expected ITV’s financial performance.”
It said its main channel shares of viewing remained flat, but the ITV family saw a 2 per cent rise, marking the first time it has seen two years of growth in a row.
Its family share of viewing has also since picked up pace, rising by 7 per cent so far in 2018 thanks to the return of Dancing On Ice and other popular shows such as The Voice, Vera, Endeavour, Trauma and Six Nations rugby.
The group is hoping for a further boost from the Fifa World Cup in June and shows set to air later this year, such as the next Britain’s Got Talent and Little Big Shots.
ITV said it was continuing the push for original content and is forecasting schedule costs of up to £1.06bn in 2018 and £1.1bn in 2019, with higher spending on sports and drama.
Its focus on content helped ITV Studios deliver another hike in sales last year, with revenues up 13 per cent at £1.6bn, although underlying earnings in the division remained flat at £243m.