ITV sees profits slump but cheers turnaround signs

Holly Williams, PA Deputy City Editor

Broadcasting giant ITV has revealed annual profits slumped by more than a third after the pandemic hit advertising revenues, but said it was seeing a turnaround despite a tough start to 2021.

The group – which aired Oprah Winfrey’s explosive interview with the Duke and Duchess of Sussex on Monday evening – posted a 39% plunge in pre-tax profits to £325 million for 2020 as revenues fell 16% to £2.8 billion.

Underlying earnings dropped 21% to £573 million, which it said was better than expected thanks to a strong end to the year and £116 million of cost savings.

ITV said the ad market in 2021 was “challenging” due to Covid-19 lockdowns and restrictions, with total ad revenues set to be down around 6% in the first quarter, but added its performance was bouncing back from the crisis.

Oprah Winfrey with the Duke and Duchess of Sussex
ITV aired Oprah Winfrey’s explosive interview with the Duke and Duchess of Sussex on Monday (Joe Pugliese/Harpo Productions)

Nearly all its programmes are back in production and total ad revenues are set to be up by around 8% in March and by between 60% and 75% in April, according to the group.

Dame Carolyn McCall, chief executive of ITV, said: “We are encouraged by the road map out of lockdown.

“We are seeing more positive trends in the advertising market in March and April and the majority of our programmes are now back in production.

“However, there remains uncertainty in all markets around the world with the potential risk of lockdowns, which if they materialise will affect revenues.”

On the Meghan and Harry interview, she said ITV did not have viewing figures yet, and added it was likely to only cover the costs of airing the programme.

She said there was a “frenzied bidding war” for the interview, adding: “We will cover the costs of the programme and we’ll be pleased with that.”

ITV plans to follow up the interview with a raft of programmes and “context pieces”, she added.

The group also confirmed that hit show Love Island will return this summer, but that the location is still under discussion, given travel restrictions.

Gwrych Castle in Abergele, North Wales
Gwrych Castle in Abergele, North Wales, was the base for last year’s I’m A Celebrity! (Jacob King/PA)

I’m A Celebrity … Get Me Out Of Here! will also air again in the autumn, with ITV hoping the show will be able to return to Australia if allowed.

But she said last year’s setting in Gwrych Castle in North Wales was a “tremendous success”.

ITV’s results showed advertising revenues tumbled 11% in 2020 to £1.6 billion as it said the onset of the crisis meant “many brands reducing, or stopping their advertising spend completely”.

Second quarter ad revenues crashed 43%, though this improved gradually throughout the year and ITV saw 3% growth in the final three months of the year.

Dame Carolyn said the group was “committed to taking further cost out of the business”, with higher-than-expected permanent cost savings of around £100 million a year due by 2022 – with £30 million of this due in 2021.

The group said it would resume paying dividends to shareholders “as soon as circumstances permit”.