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ITV is to push through another £35m of cost cuts after it revealed a slight drop in profits and warned net advertising revenues could drop 20% in September.
The broadcaster, which published its interim results for the first half of the year this morning, posted a pre-tax profit of £91m, down from £127m during the same period in 2007. However, revenue increased slightly to £1.031bn, boosted by gains in its global content and online operations.
Some components of ITV executive chairman Michael Grade's turnaround strategy have been reassessed, with future annual revenue targets revised downwards in global content and online - the latter precipitated by the news in June that commercial video on demand venture Kangaroo faces scrutiny by the Competition Commission.
ITV also plans to pay an interim dividend of 0.675p per share because of "the uncertain economic outlook and the company's decision to maintain the investment in programming to deliver the turnaround strategy".
Executive chairman Michael Grade explained: "Almost a year into the Turnaround Strategy, we have made considerable operational progress. With more viewers watching more ITV programmes, we are delivering greater value for advertisers. We have out-performed the market in terms of advertising revenues and viewing share. Our Global Content business is growing strongly and our presence online is strengthening, notwithstanding the delay in launching Kangaroo.
"Whilst our visibility on advertising revenues beyond September is limited, with a strong schedule in place for the rest of the year and planned for 2009, we are confident that we will continue to outperform.
"However we cannot control the economic environment in which we operate. As a result of the recent slowdown in the television advertising market, the Board has taken some tough decisions which are reported here today.
"We are implementing a new cost efficiency plan which will deliver £35 million in additional annual savings by the end of 2010. We are taking a £1,600 million impairment charge on Broadcasting goodwill and we are adjusting the turnaround targets for Global Content and Online. We continue to work with regulators, making the case for an urgent reduction in ITV's regulatory burden."
