ITV profits rise 6% as production division expands

ITV achieved global success with Downton Abbey

ITV has reported a 6% rise in annual pre-tax profits to £641m as revenue from ITV Studios jumped by a third to £1.24bn.

The UK's biggest commercial broadcaster said it expected to outperform the television advertising market in 2016.

Advertising revenue rose 6% to £1.72bn, with total revenue up 14% to £3.38bn.

However, total viewing across its channels fell by 3% last year, with the share for the main ITV channel falling from 15.6% to just 15%.

The broadcaster, which shows dramas such as Downton Abbey and Coronation Street, said ratings came under pressure in 2015 from the launch of new digital channels, a strong year for the BBC and a poor performance from some programmes.

Chief executive Adam Crozier said ITV had an additional 50 hours of drama in the schedules for 2016 as well as major sporting fixtures including the Euro 2016 tournament.

Shares in ITV fell more than 5% to 236.8p in afternoon trading in London.

Analyst Steve Liechti at Investec said the outlook for the first quarter of 2016 was worse than expected.

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Steve Clayton, head of equity research at Hargreaves Lansdown, said its shares had done well last year, driven by an improving advertising outlook and a series of acquisitions.

"ITV looks to be in a good position; its balance sheet is sufficiently strong to keep funding the acquisition of new production houses. That gives more content to use at home and to sell abroad," he said.

"Earnings are enhanced by the deals, and ITV becomes less dependent on terrestrial advertising revenues, which are still an important source of income for the group."

John de Mol's Talps Media was bought by ITV last year

ITV Studios has become a global production business and was now the largest independent production company in the US. Just over half of its revenues were generated outside the UK.

Last year's acquisition of John de Mol's Talpa Media has brought talent show format The Voice into the ITV stable. While the firs three series were shown on the BBC in the UK, it will move to ITV next year.

Other ITV Studios successes included US dramas Aquarius and The Good Witch.

All change

Sir Peter Bazalgette, the man credited with bringing Big Brother to the UK, was appointed as chairman of ITV last month.

He replaced Archie Norman, who has chaired the broadcaster since January 2010.

The former Endemol UK chairman is already a non-executive director at ITV and will take over from Mr Norman on 12 May.

ITV director of television Peter Fincham has announced he is leaving ITV and has been replaced by managing director of ITV Studios Kevin Lygo.

Julian Bellamy, managing director of ITV Studios in the UK, has succeeded Mr Lygo.