ITV Plc (LON:ITV) Today announced its full year results for the year ended 31st December 2017.
Full year performance delivers as expected
· Total external revenue up 2% to £3,132 million (2016: £3,064 million), driven by double digit growth in non-NAR
· Total ITV Studios revenue up 13% to £1,582 million (2016: £1,395 million), with 7% organic revenue growth, excluding currency
· Online, Pay & Interactive up 7% to £248 million (2016: £231 million), with double digit growth in Online
· ITV Family NAR down 5% as anticipated at £1,591 million (2016: £1,672 million) impacted by the uncertain economic environment
· ITV Studios adjusted EBITA flat at £243 million (2016: £243 million) with strong underlying growth, but the comparative includes £37 million benefit from The Voice of China
· Broadcast & Online adjusted EBITA down 7% to £599 million (2016: £642 million) with £81 million decline in advertising partly offset by growth in high margin Online, Pay & Interactive and the delivery of our planned cost savings
· Adjusted EBITA down 5% to £842 million (2016: £885 million)
· Adjusted EPS down 6% at 16.0p (2016: 17.0p)
· Exceptional costs of £154 million principally relate to acquisition related costs, as well as London property project costs and a one-off provision relating to The Voice of China
· Statutory EPS down 9% at 10.2p (2016: 11.2p)
Solid foundation for the future
· Total non-NAR revenue up 11% to £2,066 million (2016: £1,855 million), now 56% of total revenues (2016: 53%)
· Broadcast business remains robust
o ITV Family SOV up 2% – two years of consecutive SOV growth is a first for ITV
o ITV main channel SOCI flat as we continue to deliver all the key demographics
o ITV2 SOCI for 16-34’s up 17%, ITV4 male SOCI up 12%
o Online viewing continues to grow strongly, up 39%
· ITV Studios has a strong pipeline of new and returning programmes
Strong balance sheet and healthy liquidity
· Continued strong cash generation, with profit to cash conversion of 91%
· In line with our policy and reflecting the Board’s confidence in the business and the outlook for 2018, it is proposing a final dividend of 5.28p, giving a full year dividend of 7.8p, up 8%
· Given that there is now a more normal ordinary dividend, five consecutive special dividends, leverage of 1.0x net debt to adjusted EBITDA and the strategy refresh underway, the Board has decided not to pay a special dividend for 2017
Outlook
· Strategic refresh underway
· Viewing on-screen and online started the year strongly growing ITV’s share and volume, with a strong schedule to come, including the FIFA World Cup. Total schedule costs for 2018 are expected to be £1,055 million to £1,060 million.
· 2019 schedule costs likely to be around £1.1 billion with higher sports costs and drama spend, as we deliver more value as an integrated producer broadcaster creating, owning and distributing our own content
· ITV Family NAR forecast to be positive in the first half with Q1 up 1% and growth in Q2 around the FIFA World Cup
Carolyn McCall, ITV Chief Executive, said: “There is no doubt that ITV’s operational performance in 2017 in a challenging environment was strong. ITV delivered a great viewing performance on-screen and online and double-digit revenue growth in video on demand advertising and ITV Studios. This gives us a solid foundation to build on for the next phase of ITV’s development.
“We are very focused on our strategic refresh. This will enable us to define a clear strategy and priorities that will highlight the opportunities and address the challenges that we face in an increasingly competitive media landscape. This project is well underway.
“We have had a great start to 2018. On-screen we have grown our viewing share and volume and online we have continued to deliver double digit growth in viewing. We expect ITV Family NAR to be positive in the first half, with Q1 up 1% and growth in Q2 around the football. ITV Studios is seeing increasing demand for its formats and dramas, particularly in the UK and US, and we have over 60% of this year’s expected revenue already booked.
“Reflecting our confidence in the business, and the outlook for 2018, the Board is proposing a full year dividend of 7.8p, up 8%.”
