ITV swung back to full-year profit in 2009 after the worst advertising recession on record, but chairman Archie Norman yesterday cautioned that the next government's budget could derail the recent improvements in the advertising markets.
The UK's largest commercial TV broadcaster posted a pre-tax profit of £25m for the year to the end of December, following a £2.7bn loss in 2008.
Interim chief executive John Cresswell said ITV's cost-cutting drive, as well as moves to bolster the balance sheet and improve performance, had paid off. It was also buoyed by an improvement in the advertising market.
Mr Norman yesterday warned the ad market wasn't out of the woods yet. He said the expected “austerity budget” this year, as well as a potential increase in VAT, would have “a significant impact” on advertising.
Mr Norman said that over the past year the management team “has secured the platform for change, and change is now an imperative. The way people consume media is being transformed and consequences for established broadcasters will be profound.”
The strategic review, announced in January, is already underway, Mr Norman said, as he confirmed incoming chief executive Adam Crozier's starting date was April 26. The review had already started “to give Adam a racing start,” he said, adding: “We need to look pretty fundamentally at the shape and form that the business takes.
“Under Adam Crozier's leadership, ITV will set out on the journey to become a very different business over the next five years.”
The shrinking advertising market last year prompted ITV's ad revenues to fall 9% to £1.2bn. The situation improved during the winter, and ITV's early forecasts for April predict revenues from advertising could be up by as much as 20%. Mr Cresswell cautioned: “This is against unprecedented declines of the previous year and, over the medium-term, we remain cautious.”