Grade: Encouraged by ITV recovery

ITV has shown a lower than expected drop in profits with the release of its interim results today.

Executive chairman Michael Grade said he was encouraged by the broadcaster's recovery. Its earning before deductions in the six months to June 30 fell to £151 million from £202 million last year, around £10 million less than had been expected.

However, the drop in revenues from premium rate telephone services (PRTS) and reduction in advertising revenues has contributed to a 39% drop in pre-tax profits from £173 million to £105 million.

Grade said: "ITV has been affected by the incidence of editorial and compliance failures which have affected the television sector. Deloitte are moving towards completion of their review of our PRTS activity and in October we will publish the findings of that review and an explanation of remedial actions. We are co-operating closely with Ofcom and ICSTIS during this process."

Advertising revenues for the network fell 5% to £717 million from £752 million for the same period last year. ITV1's advertising revenue in the third quarter, with popular shows like I'm A Celebrity… and The X Factor on the schedule, is estimated to rise 1% year on year and see a 4% rise across all ITV channels.

Grade said: "I’m very pleased with progress in ITV1’s schedule performance and the outlook for revenue in Q3 is encouraging. The launch of the Autumn schedule was well received with a number of returning hit series and major events including the Rugby World Cup."

Grade also announced that Vivendi Universal's Agnès Touraine and Yahoo's Heather Killen are to join the ITV board as non-executive directors. Director and chairman of ITV's Audit Committee John McGrath will retire from the Board at the end of 2007. Mike Clasper will take over as Audit Committee Chairman in due course.

ITV is to released its recently completed business review to the market on September 12.