ITV Plc has released its full year results reporting profits fell by 32% in 2023 but that the studios business had a robust year along with digital revenue.
Group adjusted EBITA1 was down 32% at £489 million due to the decline in linear advertising revenue and investment in ITVX. Adjusted EPS was down 41% at 7.8p.
The report said that ITV Studios had achieved organic revenue growth of 5% on average per annum between 2021 and 2026 at a margin of 13 to 15% and would deliver “at least £750 million of digital revenues by 2026.”
ITV reported that it had already delivered £130m of its planned £150m costs savings with the full savings now expected to be realised ahead of the 2026 target.
The company said it is now “in the early stages of a new strategic restructuring and efficiency programme across the Group to reshape the cost base, enhance profitability, and support the growth drivers of Studios and Streaming.”
Redundancies were not mentioned but ITV said that savings will come mainly from “technology and operational efficiencies, organisational redesign across Group functions, M&E and Studios and permanent reductions in discretionary spend across the Group.”
Delivering the results, ITV Chief Executive, Carolyn McCall, 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.
“We remain confident in delivering our KPI targets, and are making good progress towards these – most notably ITV Studios organic revenue growth of 5% on average per annum between 2021 and 2026 at a margin of 13 to 15% and to deliver at least £750 million of digital revenues by 2026.
“We remain firmly committed to creating shareholder value and applying a disciplined approach to capital allocation. As announced on 1 March 2024, we will return the entire net proceeds of the sale of BritBox International through a share buyback of £235 million and the Board has proposed a final dividend of 3.3p giving an ordinary dividend of 5.0p per share or c.£200 million, for the full year.
“Our existing cost saving programme targeting £150 million between 2019 and 2026, has delivered £130 million of annualised savings to date. We are on track to deliver the full £150 million by 2025 – one year early. In addition, we are now in the early stages of a new strategic restructuring and efficiency programme across the Group to reshape the cost base, enhance profitability, and support the growth drivers of Studios and Streaming. By the end of 2024 we expect the programme to have delivered incremental annualised gross savings of at least £50 million per year, giving a £30 million in year gross benefit in 2024. The ongoing programme is designed to deliver further material incremental savings over a number of years.
“2023 was the year of peak investment for Streaming, which together with the successful execution of our strategy and the efficiencies delivered to date have made ITV more robust. ITV has a leading, scaled, global Studios business, a high growth Streaming service and a cash generative linear advertising business. This ensures that we are well placed to grow profits from here as we continue to drive material efficiencies, invest behind our strategic priorities and deliver returns to shareholders.”
Staff Reporter
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