ITV PLC (LON:ITV) said most programmes are now back in production as BritBox is delivering a good performance, after a year where profit before tax plunged 38%.
Britbox, the UK’s answer to Netflix, hit 500,000 subscriptions in its home country in January, with 2.6mln subscribers globally after the US delivered a 50% jump last year. It is also set to launch on Amazon and in South Africa during 2021.
Meanwhile, total advertising revenue (TAR) is estimated to shed 6% in the quarter to March but to soar 60-75% in April, albeit against a low comparative from last year.
The broadcaster most recently scheduled The Pembrokeshire Murders, Finding Alice, The Bay, Dancing On Ice and The Masked Singer and is now working on producing SnowPiercer for TNT and Netflix as well as Love Island in 20 countries.
This year, the programme budget will increase to £1.1bn in line with historic levels while cost savings will be around £100mln per year by 2022, compared with previous guidance of £55-60mln, which will help to fund further investments.
The TV network has also restructured the broadcast business to create the Media and Entertainment division with two business units, Broadcast for live programmes and On-demand for digital viewing, to better follow changes in audience habits.
In the year to December 31, total external revenue was down 16% at £2.7bn, with ITV Studios down 25% because of disruption in production and broadcast down 8%, with pre-tax profits shrinking by more than a third to £325mln.
Total ITV viewing was up 1% during the year, although online viewing was down 5% due to no summer Love Island, fewer episodes of the soaps and no major sporting events.
Directors said they aim to restore dividends as soon as possible, with total liquidity of £1.4bn at the year-end, comprising cash of £668mln and committed undrawn facilities of £829mln, against net debt of £545mln.
"ITV has a lot of the right ideas, and the rise of our boxset-binge culture means growing its content business offers huge potential. But as it stands, ITV is still a clunky operation, and relies heavily on traditional advertising spending," analysts at Hargreaves Lansdown commented.
"For as long as that’s the case, revenues and profits are hardly going to be rising stars in this story.”
Shares dipped 2% to 118.49p on Tuesday morning.
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