ITV ready for change as it returned to profitability in 2009

ITV (LSE: ITV) has broadly maintained earnings and reduced debt in the full-year to end-December 2009, despite a declining television advertising market, with the broadcaster’s group revenues falling 7% from a year earlier to £1.8bn. Cost-cutting enabled ITV to bank a £25m pretax profit, reflecting a return to profits following 2008's £2.7bn loss.
In his debut results statement at ITV, newly appointed chairman Archie Norman said that the independent free-to-air broadcaster had set a platform for change as it awaits the arrival of new chief executive Adam Crozier.
"Under Adam Crozier's leadership, ITV will set out on the journey to become a very different business over the next five years. ITV's challenge is to reduce its dependence on a free-to-air model threatened by digital media and besieged by legacy regulation,” Norman said.

ITV said its television advertising revenues were down 9% at £1.22 billion, noting that the total TV advertising market was down 11% during the same period. "Faced with the worst television advertising downturn on record, we took decisive action to improve our operational performance, deliver substantial cost savings and strengthen our balance sheet”, interim CEO John Cresswell commented. 

The initiatives delivered £169m cost savings in the year under review, beating the £155m target for the period. The group’s earnings, before exceptional items, were £202m, down from £211m in the previous year. ITV’s adjusted earnings per share were maintained at 1.8p, in line with 2008.

Also today, ITV announced that non-executive director Usha Prashar will be retiring from the ITV board on 31 March 2010. Prashar spent five years at ITV and is said to have played a leading role in appointing Norman as chairman and Crozier as CEO. "After nearly five years at ITV, I feel we now have secured a strong new leadership team and, in view of my other commitments, the time has come to pass on the baton", Prashar stated.

Since the end of the period, ITV said there has been a marked bounce-back in advertising spend in early 2010. However ITV continues to plan on a cautious basis, as comparatives are more challenging in the second half, particularly in the fourth quarter. Additionally the company noted that the wider economic outlook remains uncertain given the forthcoming general election.

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