ITV put its recent ratings woes behind it yesterday by unveiling a 57 per cent rise in profits in its first full-year results as a unified company.
The broadcaster said a combination of rising turnover and lower costs since it was created by a merger of Granada and Carlton in February last year had contributed to the profits surge.
Advertising revenues in 2004 were 4.7 per cent higher at £1.59 billion and gains were made in all key sectors including retail, food, entertainment and finance.
Pre- tax profits of £340 million were ahead of the £282 million forecast by the City after ITV said cost savings from the merger were "ahead of expectations in both speed and amount".
Details emerged in the week that ITV1 suffered one of its worst-ever ratings slumps, with audiences for the first two months of 2005 down ten per cent compared with a year ago.
According to the British Audience Research Bureau, ITV saw its audience share in January and February fall as low as 22.3 per cent from 24.6 per cent at the same stage of
ITV chief executive Charles Allen said that 2005 had started strongly and firstquarter revenues across its stable of channels were £56 million ahead of a year earlier.
In addition to its main ITV terrestrial channel, the group also owns 75 per cent of the GMTV breakfast channel and has a trio of digital channels in ITV2, ITV3, and the ITV News Channel. Hit shows produced by ITV have included I'm A Celebrity...Get Me Out of Here! and the broadcaster said six of the top ten ratings winners last year were shown on its channels.
The broadcaster flagged up a string of regulatory issues that are due to be resolved this year, including how much it must pay to hold a broadcast licence.
ITV1 paid a licence fee of £204 million this year but said this was too high compared to rival broadcasters such as Channel Five which paid less than £20 million.
At the bottom-line, ITV said profits totalled £207 million after stripping out mergerrelated costs of £69 million that included redundancies and asset write-offs.
The total turnover of £2.05 billion was three per cent higher than it was a year ago.
ITV has long been viewed as a potential takeover target by a private equity group or US media company, and its stock surged earlier this year on speculation that outgoing United Business Media chief Clive Hollick would mount a bid with buyout firm Kohlberg Kravis Roberts.
"Nobody's approached us at all," Mr Allen said. "There's a lot of speculation, but my job is to drive the business."
ITV has been shedding assets that pre-date the merger, but it moved in the opposite direction this week, buying £30 million of shares in soccer club Arsenal FC and bringing its stake in the club to nearly ten per cent.