ii view: ITV eyes more streaming and content growth
Enjoying smash hits such as ‘Mr Bates vs the Post Office’ and offering an attractive dividend yield. We assess prospects for this FTSE 250 company.
27th March 2025 15:43
by Keith Bowman from interactive investor
Full-year results to 31 December
- Total revenue down 3% to £4.14 billion
- Media & Entertainment (M&E) revenue up 1% to £2.1 billion
- Studios revenue down 6% to £2.04 billion
- Adjusted pre-tax profit up 19% to £472 million
- Net debt down 22% to £431 million
- Final dividend of 3.3p per share
- Total 2024 dividend payment of 5p per share unchanged from 2023
- £198 million of a £235 million share buyback programme completed
Guidance:
- Expects to deliver a further £30 million of cost savings in 2025
Chief executive Carolyn McCall said:
"Three years ago we announced the second phase of our More than TV strategy and today's results show our significant progress and success in navigating the rapidly changing media industry.
"ITV Studios has delivered record profits this year, despite the one off impact of the writers and actors strike and a softer demand from free-to-air broadcasters, which reflects the strength, scale, diversification and creativity of ITV Studios production companies across the world.
"ITVX has been the UK's fastest growing streaming platform over the last two years and coupled with our programmatic advertising platform, Planet V, has delivered significant growth in both digital viewing and revenues and is providing attractive returns.
"Our ongoing transformation ensures we are an adaptable and agile company, well positioned to deliver good profitable growth, strong cash generation and attractive returns to shareholders."
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ii round-up:
ITV (LSE:ITV) is an integrated producer and broadcaster.
The group’s Media and Entertainment business delivers content through linear TV broadcasting as well as via digital on-demand or its streaming platform ITVX.
The Studios business produces, owns and distributes content for both ITV channels and third parties in the UK and overseas.
For a round-up of these latest results announced on 6 March, please click here.
ii view:
Headquartered in London, ITV employs close to 7,000 people. The Studio business generated most adjusted profits (EBITA) in 2024 at 58%, with Media & Entertainment the balance of 42%. Management’s strategic focus is to expand its UK and global production business, supercharge the Streaming business and optimise Broadcasting, with the aim of ITV being a leader in UK advertiser-funded streaming and an expanding global force in content by 2026. The internet and the globalisation of media mean it competes against streamers such as Netflix Inc (NASDAQ:NFLX), Apple Inc (NASDAQ:AAPL) and Amazon.com Inc (NASDAQ:AMZN) owned Prime.
For investors, creativity in making new popular programmes is a tough ingredient to achieve consistently. The importance and volatility of the sporting calendar in generating ad sales cannot be ignored, with the Euro 2024 football championship offering a tough mid-2025 comparative. Events outside of management’s control such as writers strikes can impact performance, while competition now includes streaming giants such as Alphabet Inc Class A (NASDAQ:GOOGL) owned YouTube, The Walt Disney Co (NYSE:DIS), and even China’s TikTok.
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More favourably, a diversity of revenues exists, from programme content sales to monthly streaming subscription fees for ITVX and advertising sales. Group costs continue to be reduced. Net debt has been cut, while robust cash flows have underpinned more than £1.4 billion of shareholder returns since 2018.
In all, intense competition and the now global business of streaming are reason for caution. That said, investors may be attracted by potential for an eventual takeover and a forecast dividend yield of around 6%.
Positives:
- Diversity of revenues
- Attractive dividend (not guaranteed)
Negatives:
- Intense global competition
- Advertising revenues are economically sensitive
The average rating of stock market analysts:
Hold
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