Acquisitions lift ITV Studios

ITV Studios’ revenue grew strongly in the first half of the year, buoyed by its acquired production companies.

Sales were up 31% year-on-year at UK broadcaster ITV-owned ITVS, taking the total to £651 million (US$853 million), with revenues from Netherlands-based Talpa, UK prodcos Twofour and Mammoth Screen bolstering the total.

On a like-for-like basis, stripping out the contributions from the companies acquired in the past year, revenue at ITVS was actually down 4%, however, with ITV saying new US arm ITV America has been hit by the timing of some key shows. ITV America revenues fell 34% year-on-year, taking the total to £96 million.

ITV said that the fact Texas Rising did not get a second season and the timing of new seasons of Hell’s Kitchen and Duck Dynasty hit its US business.

Despite that, the content arm of ITV said that half of all revenues now come from international markets.

ITV Studios’ interim EBITA profit was £121 million, a 42% increase on the 2015 total. Within the ITV Studios Global Entertainment distribution business, revenue was up 11%, taking the total to £79 million.

Overall revenue at the UK-listed company was £1.7 billion, up 12% year-on-year. EBIT profit increased 9% over the same period, taking the total to £425 million.

ITV said it will look for £25 million in cost savings in 2017 amid the market uncertainty created by the UK’s decision to exit the EU.

“On screen we are performing well and we remain focused on delivering both mass audiences and the key demographics,” the broadcaster said this morning. “However, we expect our viewing performance over the summer to be impacted by the Olympic Games on the BBC. We expect online, pay and interactive to deliver double-digit revenue growth over the full year as it continues to perform strongly.”

Addressing its international business, it added: “ITV Studios is on track to deliver double-digit revenue and adjusted EBITA growth over the full year, driven by the acquisitions we have made. Over the medium term we are confident in delivering good growth in our global network of content creation and distribution, organically and through acquisitions, although the short term performance will continue to be lumpy.”

ITV has been on an ongoing acquisition spree and that shows no sign of ending. The network said: “Whilst the economic outlook remains uncertain we continue to see clear opportunities to invest across the business, both in the UK and Internationally.”

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