ITV Jumps as It Cuts Reliance on Ads and Pays Special DividendKristen Schweizer
ITV Plc, the U.K.’s largest commercial broadcaster, will pay a special 250 million pound ($384 million) dividend on expectations of a strong 2015. The shares rose as much as 6 percent, the biggest jump since July.
Sales rose 8 percent in 2014 to 2.6 billion pounds, including a 6 percent increase in net advertising revenue for the company -- whose shows include “Downton Abbey” -- despite a decline in audience share.
ITV is developing its television production and Internet businesses as it seeks to cut exposure to the advertising market. Non-advertising sales climbed 10 percent to 1.3 billion pounds, about half total revenue.
“ITV is now a more balanced business with strong underlying cash flows,” said Chief Executive Officer Adam Crozier. “As we enter the next phase of our strategy we continue to see investment opportunities.”
London-based ITV said last week it’s in exclusive talks to acquire Dutch billionaire John de Mol’s Talpa Media, producer of “The Voice” singing competition. Crozier said on a conference call that any future takeover by his company will be to build its production arm, ITV Studios.
Separately, Crozier said ITV has little contact with 6.4 percent stakeholder Liberty Global Plc and that there are no extraordinary talks taking place with the John Malone-controlled cable company.
ITV operates a number of channels that air comedies, talk shows, reality programs and drama. It also invests heavily in creating original content through its ITV Studios with offices in the U.S. and U.K. Shows include “Mr Selfridge” starring Jeremy Piven, as well as long-running British soap opera “Coronation Street.”
ITV Studios, maker of shows such as “Hell’s Kitchen,” increased revenue by 9 percent to 933 million pounds, while sales in the online, pay and interactive business rose 30 percent.
ITV signaled that 2015 had started well, with net advertising revenue expected to rise 11 percent in the first quarter.
The shares were 4 percent higher at 230.7 pence at 9:03 a.m. in London.