 The merger has gone well, Charles Allen says |
Broadcaster ITV has reported a 57% rise in profits at the end of its first full year as a combined company, helped by a rise in advertising revenue. Pre-tax profits were �340m, with advertising revenue up 4.7% for the full year, ahead of City forecasts.
The company, which controls more than half of the UK television advertising market, was created by the merger of Carlton and Granada last year.
Cost-cutting also drove the profits growth, the company said.
This helped offset the impact of falling audiences for its flagship ITV1 channel.
"ITV has had an outstanding first year," said CEO Charles Allen.
ITV said advertising revenue from its ITV1, ITV2, ITV3 and ITV News channels was up 12% in the quarter ending in March, thanks partly to the early timing of the Easter holiday season.
Viewing figures
On Tuesday, figures revealed that ITV1's audience share was down 10% in the first two months of the year as the channel was hit by the loss of 'I'm A Celebrity...Get Me Out of Here', the popular reality TV show that ended last year.
On average, TV viewers now watch less than one hour of the flagship channel every day, according to official figures released by the Broadcasters' Audience Research Board (Barb), with average viewing down to five hours and 47 minutes a week.
ITV1's total share of the UK TV market fell to 20% from 22% over the year.
More worryingly for the channel, it lost the attention of some of the younger and more affluent viewers in the first two months of the year, which are the most targeted by advertisers.
Among 16 to 34-year-olds, ITV1's audience share fell by 22.8%.
Digital impact
The stronger-than-expected results for ITV as a whole reflect the success of the digital channels of ITV2 and ITV3, which has helped to dilute the impact of the falling viewing figures on ITV1.
 | OTHER ITV INTERESTS A 75% interest in GMTV A 16.9% interest in SMG, which operates the two regional Channel 3 licenses in Scotland Stakes in Ireland's TV3 TV network and Australia's Seven network Stakes in Arsenal FC and Liverpool FC |
Importantly, ITV still has six of the UK's most popular programmes, including long running soaps Coronation Street and Emmerdale.
Cost-cutting, along with the advertising revenue, was a major factor behind the company's performance.
"We have just completed our first year as a single, unified company and during that period we have streamlined and improved our operations and delivered cost savings ahead of expectations in both speed and amount," said Mr Allen.
Commenting on the results, Investec analyst Kingsley Wilson said: "People have clearly underestimated the operational gearing of the business."
"They look extremely strong, well ahead of consensus."
License review
Meanwhile, ITV is hoping for extra revenues if new regulatory decisions fall in its favour.
The amount ITV1 pays for its licence to broadcast - currently �204m a year - is up for review. Rival broadcaster Channel Five pays less than �20m and Channel 4, BBC and BSkyB pay nothing at all.
The newly-combined company group has already been viewed as a potential takeover target.
Shares in ITV surged earlier this year on speculation that former United Business Media chief Clive Hollick would mount a bid with private equity group Kohlberg Kravis Roberts.
But Charles Allen dismissed the takeover rumours.
"Nobody's approached us at all," Mr Allen said. "There's a lot of speculation, but my job is to drive the business."
The shares closed on Wednesday at 124.75 pence, up more than 4% on the day.
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We have streamlined and improved our operations and delivered cost savings ahead of expectations
