ITV reveals plans to save £35m as pre-tax profits plunge
ITV has announced plans to make additional savings of £35 million by 2010 following its interim results which saw pre-tax profits tumble 28%.
The broadcaster said its pre-tax profits were £91 million for the six months to June, compared with £127 million in 2007.
In addition, ITV said it expects its net advertising revenue to be down 20% in September, with the total TV market down 17%.
In light of today’s results, ITV announced the new saving plan of achieving £35 million in additional annual savings by the end of 2010. This is on top of the already announced drive to make £41 million in savings by the end of 2008 and £40 million of regional savings by the end of 2009.
Executive chairman Michael Grade has also adjusted the broadcaster’s turnaround strategy, announced in September last year.
Its global division, which includes ITV Productions, will now seek to grow its annual revenues to £1 billion by the end of 2012. The previous target was £1.2 billion.
But according to today’s results, the division’s revenues were up 3%.
The broadcaster has pushed back its target of reaching online revenues of £150 million by 2010 to the end of 2012.
ITV said the extra time allowed for a delay in the launch of Kangaroo, a new on-demand service from ITV, Channel 4 and the BBC. The adjustment has been made despite online revenues growing 3% in today’s results.
Speaking about the results today, Grade said: “Almost a year into the turnaround strategy, we have made considerable operational progress. With more viewers watching ITV programmes, we are delivering greater value for advertisers. While our visibility on advertising revenues beyond September is limited, with a strong schedule in place for the rest of the year and planned for 2009, we are confident we will continue to outperform.”
He said the “slowdown in the television advertising market” had forced the board to take some “tough decisions”, namely the £35 million savings by 2010.
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