ITV Delivers Profit Surge Despite Revenue Dip, Bolstered by Streaming and Cost Cuts

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ITV, based in the U.K., reported robust earnings expansion in their annual financial report for the year 2024, even amid hurdles posed by U.S. actor and writer strikes and a weakening appetite for broadcasting among traditional networks.

The massive UK-based media conglomerate announced a significant 11% rise in group adjusted EBITA (which stands for earnings before interest, taxes, and amortization) to a whopping £542 million ($700 million). This impressive growth was primarily fueled by exceptional profits at ITV Studios and robust expansion within their Media & Entertainment sector.

Three years back, we unveiled the second stage of our ‘More Than TV’ strategic plan, and today’s figures demonstrate our impressive advancement and achievement as we adapt to the fast-paced evolution of the media sector,” remarked Carolyn McCall, ITV’s CEO, in a recent earnings statement.

The overall income from all groups decreased by 3%, amounting to approximately $5.34 billion. This decrease in ITV Studios’ earnings counteracted the increase in advertising revenues. The group’s income from external sources also dropped by 4%, reaching $4.51 billion.

Or, more casually:

Overall sales dipped 3% to $5.34 billion, as a drop in ITV Studios earnings cancelled out the growth in ad revenue. External sales were down 4% at $4.51 billion.

In 2024, ITVX, the company’s streaming platform, showed exceptional performance. Digital viewership increased by 12%, and digital advertising revenue surged by 15%. As mentioned by McCall, ITVX has been the U.K.’s most rapidly expanding streaming service over the past two years, generating appealing earnings ahead of schedule. This growth significantly contributed to a 22% increase in Media & Entertainment (M&E) profits, amounting to approximately $322 million.

The company announced that starting from 2024, the additional digital income surpassed the ITVX expenses on a yearly basis, which was actually two years ahead of schedule. Moreover, they expect to recover their total ITVX investment well before the initially predicted timeframe by the end of 2025.

Despite a 6% decline in revenue to approximately $2.63 billion, ITV Studios managed to boost its adjusted EBITA by 5%, reaching $386 million, with an enhanced margin of 14.7%. This was achieved through the success of various productions such as “Mr Bates,” which became the U.K.’s top drama in 2024, “Fool Me Once,” one of Netflix’s most popular shows ever, and “Rivals,” hailed as Disney+’s breakout hit.

2024 saw the company’s efficiency initiative yield a total of $77.5 million in cost reductions, surpassing the projected target by $12.9 million. The savings plan is set to carry on into 2025, with an anticipated additional $38.7 million in non-content related savings on the horizon.

McCall highlighted ITV’s growing robustness, pointing out that content creation and digital earnings now account for almost two-thirds of the company’s earnings. The statutory operating profit surged to $410 million, a rise from $307 million in 2023, while pre-tax profits skyrocketed to $672 million.

The broadcaster’s profit-to-cash conversion rate stood at a high 83% during that year, and their net debt significantly decreased from $713 million in 2023 to just $5.57 billion.

For the year 2025, ITV predicts a positive increase in revenue for ITV Studios. However, profit margins may dip compared to 2024, but they will still fall within their set target range of 13-15%. Additionally, ITV unveiled its strategic initiative, Zoo 55, a new digital studios label, which was launched in January 2025. The aim is to generate high-profit growth by tapping into the global digital distribution market.

ITV anticipates generating at least 967 million dollars in digital income by the year 2026. To achieve this, they’re planning to broaden their digital reach via a strategic collaboration with YouTube, while also investigating alternative sources of income beyond just advertising.

The board suggested a final dividend of 3.3 pence per share, which added up to a full-year dividend of 5.0 pence. In total, this amounted to approximately $245 million.

McCall underscored the fact that content creation and digital sources nearly comprise two-thirds of our income, indicating that ITV is evolving into a more robust company. This transformation makes us capable of providing consistent profitable expansion, substantial cash flow, and appealing profits for our shareholders.

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2025-03-06 10:47