ITV boss keeps all options open as profits rise

The Chief Executive of ITV, Dame Carolyn McCall, has indicated that the company will keep “all options open” while it considers the future of its production arm. Speaking amid speculation about a potential separation of ITV’s production and broadcasting businesses, McCall emphasised the benefits of the current structure. She noted that ITV Studios’ in-house labels gain significant exposure by showcasing their content on ITV channels, making shows famous quickly.

ITV has been in discussions regarding potential partnerships, with reports of talks earlier this year between ITV and Abu Dhabi-backed RedBird IMI, which controls the sale of the Telegraph titles. While McCall declined to confirm negotiations with All3Media or its owners, she acknowledged that reviewing strategic options was standard practice for the board. Despite external pressure to unlock value from ITV Studios, long regarded as the company’s most prized asset, McCall pointed out the synergy gained under the existing operations.

The challenges of 2023, including the Hollywood writers’ and actors’ strikes, weighed on ITV’s scripted production output, which fell by 6 per cent to 296 hours. However, the company successfully capitalised on higher-margin back catalogue sales and achieved £25 million in cost savings, bolstering its adjusted profits to a record £299 million, up from £286 million the previous year.

Despite an uncertain free-to-air advertising market, ITV witnessed an overall 1 per cent growth in its media and advertising division. This was primarily driven by a 15 per cent rise in digital advertising, offsetting a 10 per cent drop in traditional linear advertising revenues. Adjusted profits for the division rose by an impressive 22 per cent to £250 million, aided by £35 million in operational cost cuts.

Pre-tax statutory profits surged to £521 million from £193 million in the previous year, largely on the back of the sale of ITV’s 50 per cent stake in Britbox to BBC Studios. The company declared a dividend of 5p per share, maintaining the same level as the prior year. While some uncertainty remains regarding the recovery of the linear advertising market, McCall struck a more optimistic tone on ITV’s outlook, highlighting the stabilising influence of political calm and continued strategic efforts to streamline operations.

ITV has pledged to find further savings, with another £30 million targeted for 2025, alongside £60 million already achieved last year. One such move involves ceasing standard definition broadcasts, a change that aligns with both cost efficiency and advancing technological trends. Even amidst headwinds, McCall expressed confidence in ITV’s ability to adapt and deliver value to shareholders.