Operating profit down at ITV

ITV has reported an operating profit of £264m for 2006, down from £329m in 2005. Revenues were largely flat year-on-year, with the company earning £2.181bn in 2006 compared to £2.196bn in 2005.

The broadcaster's executive chairman Michael Grade said that ITV's "overall strategy is right" and said that "unique strengths in brand, content and distribution are cause for considerable optimism."

"ITV has not had an easy time in recent history, operating in the highly competitive and technology driven media sector," he said. "It faced a challenging advertising market and speculation over both its leadership and its ownership.

"My brief is to restore the fortunes of the Group and thus return the business to growth.

"Having been in post for two months it is too soon to conclude definitive plans for the business, but generally I have developed more positive impressions than negative ones, and the latter are mostly within our control to remedy."

Grade noted that during 2006 there was a "lack of innovation" in ITV's programming "partly resulting from a fear of ratings failure". He also pointed to the contract rights renewal mechanism as "punitive". He said that ITV "must raise our creative ambition" and added that he is "definitely encouraged" by moves undertaken by Simon Shaps and his commissioning team. In particular, he said that ITV would look to "regain... pre-eminence in drama series on ITV1 at 9.00pm".

ITV will also seek to tackle what it described as an unrealistic regulatory burden.

"Our regulatory environment needs to reflect the reality of our 21st century structure and the developing market in which we operate these days," explained Grade. "ITV may have consolidated, but it is a long way from the advertising monopoly of yesteryear.

"The regulatory burden has yet fully to reflect this."