ITV profits decline 35% on premium rates scandal

Michael Grade said ITV is "on track" despite 35 per cent profit drop

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Wednesday, 05, Mar 2008 09:14

Pre-tax profit at broadcaster ITV has declined 35 per cent to £188 million but the turnaround plan is "on track" chairman Michael Grade said.

Broadcasting revenue fell 59 per cent to £738 million compared to 2006, largely because of the significant reduction in premium rate services, ITV said.

Charges for premium rate calls - which are used for audience participation in voting and competitions - were refunded or scrapped in some cases after a scandal which affected several broadcasters, including the BBC and Channel 4.

Fines and reimbursements relating to the calls cost the company £18 million.

"It was a tough year for ITV and all UK broadcasters, with the issues of trust coming to the fore, in particular in the context of premium rate services," Mr Grade said.

Competition from other digital channels also affected profits. ITV said its share of commercial impacts - individual viewings of 30 second commercials - fell to 32 per cent compared to 33.1 per cent in 2006.

ITV television advertising revenues fell by 0.3 per cent in 2007 compared to an 8.4 per cent drop in 2006 and against total growth in the market in 2007 of 3.1 per cent.

But ITV family viewing was up for the year-to-date at 23.2 per cent at the start of 2008, compared to last year, at 23 per cent.

Mr Grade said "In my first year back at ITV, we put together a growth strategy for the business and strengthened the senior team. The first priority for ITV was to stem the decline.

"We did more than that, delivering an increase in viewing to the ITV family for the first time in over a decade. For the first time in many years, ITV1 outperformed its competitors and we've continued to do so into 2008."

The company has held its final dividend at 1.8p, bringing the total dividend to 3.15p.