ITV has reported a 61% drop in pre-tax profits to £193m in 2023, down from £501m the previous year, as a severe advertising downturn outweighed record revenues from its studios business. The UK's largest free-to-air commercial broadcaster attributed the decline to falling advertising revenue and planned investment costs in its ITVX streaming service.
Group revenues fell 2% to £4.3bn, with TV advertising down 15%. However, digital revenues rose 19% and the studios arm, which produced the hit drama Mr Bates v the Post Office, saw a 4% increase to £2.2bn. The broadcaster said it would cut an additional £50m in costs, mainly through technology and operational efficiencies, on top of an existing £150m savings target.
Chief executive Carolyn McCall described the advertising market as the “worst advertising recession since the global financial crisis” of 2008. She said it was “way too early” to discuss job impacts, though the company has already frozen hiring and clamped down on expenses. McCall noted that total advertising revenue is expected to rise 3% in the first quarter of 2024, boosted by digital advertising and events like the Uefa Euro 2024 football championships.
The Mr Bates v the Post Office drama, which aired in January, attracted 4 million viewers per episode on ITV and an additional 10 million via ITVX. McCall said the show had been sold to 12 markets worldwide and highlighted its societal impact. ITV also sold its 50% stake in BritBox International to BBC Studios for £235m, which it plans to return to shareholders.
Looking ahead, ITV warned that 2024 results would be affected by the 2023 US writers and actors strike, delaying about £80m of revenue until 2025, and weaker demand from European free-to-air broadcasters. Despite the challenges, McCall expressed confidence that the advertising market would improve this year.
