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ITV plc Delivers Double-Digit Profit Growth

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itvITV (LSE: ITV) is currently marginally down (-0.1%) on the morning that it released its interim results for the half-year to 30 June 2014, in which it reported that adjusted pre-tax profit was up 16%, at £312m.

The company reported that all parts of the business had delivered revenue growth, with total external revenues up 7% to £1,225m. Net Advertising Revenues (NAR) from the main ITV “family” of channels (which includes pretty much anything with “ITV” in its name) was up 7%, ahead of the TV advertising market, and revenue from Online, Pay and Interactive services grew by 20%, rising to £67m. Total revenues from ITV Studios edged up 2%, to £402m, with growth held back by the proportion programme budget that had been allocated to coverage of the football World Cup.

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Group earnings before interest, tax and amortisation (EBITA) were up 11%, at £322m, with ITV Studios EBITA contributing £72m, a rise of 14%, and EBITA from Broadcast & Online operations up 10% at £250m. Adjusted earnings per share grew 15% to 6.1p.

The board is recommending an interim dividend of 1.4p per share, which is expected to be around one-third of the full-year payout. The board also announced a commitment to growing the ordinary dividend by 20% per annum over the next three years.

Looking ahead, ITV says it expects to achieve £15m of cost-savings over the full year — £5m ahead of target. It also says that full-year NAR from the main ITV Family of channels is expected to “significantly outperform the market” and that in the second-half its Online, Pay & Interactive business will deliver “strong revenue growth” that is at least in line with the first half.

CEO Adam Crozier’s comments on the results included:

We have made further good progress with our strategy of growing and strengthening all parts of ITV.

“We will continue to rebalance the business and grow new revenue streams, both organically and through acquisition. We see clear opportunities for growth across the business – in content, online, pay and advertising and there will be an increasing emphasis on international content creation and distribution.

At 204.8p, ITV’s share price is up 5% on the year-to-date, compared with a FTSE 100 that’s only risen 1%. And over the past 5 years, ITV’s share price has left the index standing, with an increase of 440%, versus a 49% gain for the FTSE 100.

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Jon Wallis has no position in any shares mentioned. The Motley Fool has no position in any of the shares mentioned.

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