Shares in ITV surged after the UK broadcaster said pre-tax profits more than doubled last year, boosted by record results at its TV production division and cost-cutting.
Total revenue fell 3 per cent to £4.1bn in 2024, with growth in advertising revenue offset by a decline in its ITV Studios business, which was still recovering from the impact of Hollywood strikes in 2023, the company said on Thursday.
ITV chief executive Carolyn McCall said cost-cutting had delivered savings while enabling the company to grow investments, offset higher costs and improve its margins. ITV said pre-tax profits jumped to £521mn, from £193mn the year before, and pledged to trim a further £30mn in costs this year.
The company’s shares gained 6 per cent to 73.80 pence in early afternoon trade on Thursday, pushing its gain over the past 12 months to 21 per cent and giving it a market valuation of £2.7bn.
McCall talked up the “benefits” of the existing model of having an integrated TV production arm with its broadcasting operations, but said the board “review everything” amid talk of a potential sale of the division.
ITV has held preliminary talks with RedBird IMI, the Abu Dhabi-backed investment group that last year acquired rival All3Media for more than £1.1bn, according to several people familiar with the situation.
Several other suitors had also looked at the business, the people said, including private equity groups CVC and Blackstone, and rivals such as Banijay, one of Europe’s largest production groups.
McCall declined to comment on any sales talks and the potential break-up of the business but said “there are definite merits to being integrated”.
“But I will say that every board, everywhere, has to keep all options open. And our board is no different to that. We review everything and we review it regularly.”
ITV warned that advertising revenue this year would be hit by the planned introduction of UK government restrictions on the marketing of less healthy foods from October.
McCall described the policy — which bans adverts for certain foods on TV before 9pm — as “flawed” and unlikely to achieve its goals of addressing childhood obesity. ITV will also take an additional £7mn cost from an increase in national insurance contributions this year.
She predicted “good growth” this year for both ITV Studios — which makes shows such as The Voice and Rivals — and its digital operations, which together account for close to two-thirds of revenue.
ITV Studios is expected to deliver revenue growth in 2025, but with a weaker profit margin than 2024, owing to a lower proportion of high-margin sales of its existing catalogue, and a higher proportion of lower-margin scripted shows.
ITV said that it would seek to generate revenues from digital ventures including a distribution and commercial partnership agreement with YouTube, making more content available on the platform, and developing digital revenue streams beyond advertising.