ITV PLC said it remains in discussions with Sky regarding a possible sale of its media and entertainment business as it posted a smaller decline in profits for 2025 than expected.
Group external revenue edged up 1% to £3.5 billion, with 10% growth in ITV Studios' external revenues helping to offset a 5% fall in total advertising revenue, despite a 12% rise in digital advertising. This compared to a strong 2024 comparative that was boosted by the Men's Euros.
Group adjusted EBITA slipped 1% to £534 million and adjusted earnings per share declined 11% to 8.5p.
Chief executive Carolyn McCall said the results demonstrated "the scale of our transformation," pointing to two-thirds of revenues now coming from ITV Studios and its digital media and entertainment business. ITVX viewing was up 16% on the year.
ITV revealed discussions with Sky in November, though today it cautioned there was no certainty a deal would be reached.
The board proposed a full-year ordinary dividend of 5p per share, flat compared to a year earlier.
Looking to the current year, ITV Studios is on track for "another year of good growth in revenue", while the group expects the expanded Men's FIFA World Cup to provide a meaningful boost to advertising revenues in the second and third quarters.
Total ad revenue in Q1 is forecast to be down around 2%, which is better than it had expected, with advertisers holding back budgets in order to spend in Q2 and Q3 around the World Cup.
The broadcaster will be showing 19 more matches than in 2022, and with more matches at peak time and is "confident that the football will deliver a strong advertising performance".
ITV Studios' full-year adjusted EBITA margin is expected to come in at the lower end of its 13% to 15% target range, with revenues and profits weighted to the second half due to the phasing of scripted deliveries and high-margin licensing deals.
The group also flagged a further £20 million of permanent cost savings planned for 2026.