ITV profits more than halve amid advertising slump

Broadcaster to cut costs faster as it suffers 15pc fall in TV ad revenue

ITV’s profits have more than halved as the broadcaster battles a slump in advertising revenues.
The company reported full-year profits of £193m for 2023, down from £501m in 2022, as advertising income dropped by 8pc.
Following the results, ITV said it would cut costs faster than previously expected, completing a £150m savings plan a year earlier than planned.
It said it would also conduct a further restructuring programme to save another £50m a year.
Chief executive Dame Carolyn McCall said last year that the company was going through the worst advertising downturn since the financial crisis.
This led to ITV’s full-year revenues falling by 2pc to £4.3bn in 2023. This was still the second-highest turnover in its history, although it was the first full-year drop in revenues since 2009, excluding the pandemic. 
Dame Carolyn said the advertising market in broadcast television had been “challenging”. 
TV advertising fell by 15pc in 2023, although this was partly offset by growing digital advertising from its streaming service, ITVX.
The company pointed to strong growth in its production business, ITV Studios, but said that sales will be blunted by last year’s Hollywood writers’ and actors’ strikes.
Shares rose by 5pc in early trading.
Dame Carolyn said: “In 2023 we saw the benefit of the actions we have taken to reposition ITV towards higher sustainable growth.
“Our studios business recorded the highest ever revenues and profits and in its first year ITVX delivered strong growth in viewing and digital revenue with investment on plan. This growth in production and streaming substantially offset the challenging linear TV advertising market conditions.”
ITV also said it expected advertising revenues to rebound slightly at the start of this year, saying they were forecast to climb 3pc in the first quarter. “We definitely see more confidence in the advertising market,” Dame Carolyn said. “We expect this year to be better than last year.”
ITV has recently been boosted by the success of Mr Bates vs The Post Office, which was its biggest new drama in a decade.
Traditional broadcasters are facing tough competition from deep-pocketed rivals such as Netflix and Disney.
ITV has launched its own streaming service in a bid to win over younger audiences and offset the decline in terrestrial viewing.
Last week it sold its stake in BritBox International to partner BBC for £255m as bosses focus on the company’s own streaming push.
ITV said it would return the proceeds to shareholders through a share buyback starting next month.
But the company is still struggling to win over investors. Its shares are down more than 50pc over the last five years and are now trading close to their lowest level since the financial crisis.
The Love Island broadcaster has been shifting its focus to ITV Studios, which is behind hits made for other broadcasters including Line of Duty and Bodyguard.
ITV is exploring ways to expand its studios business. Last year it weighed up a bid for All3Media, the production company behind Gogglebox and The Traitors.
However, it pulled out of the process early on and the company was ultimately snapped up by RedBird IMI, the UAE-backed fund that is also attempting to buy The Telegraph, in a £1.15bn deal.
ITV is now expected to explore other acquisitions in the production sector, which has been hit by dwindling commissions.
ITV’s struggles have fuelled speculation that the broadcaster could look to sell off a stake in its production arm. Dame Carolyn has insisted that ITV has no plans to sell or spin off its studios business altogether.
But the company could come under pressure for a break-up after a Mayfair fund last month took a £120m stake in the business.
Silchester International Investors has taken a 5pc stake, making it one of ITV’s largest shareholders.