ITV targets consumers under new boss McCall

ITV unveiled a plan to focus on production and sell more to consumers as the Love Island broadcaster announced a reduction in first-half earnings caused by the cost of the FIFA World Cup.

Stamping her mark on the FTSE 100 company after taking over in January, chief executive Carolyn McCall said ITV would spend £60m on the plan over three years starting in 2019 while cutting costs by up to £40m. In 2019 investment will be £40m and cost cuts will be £15m.

Adjusted earnings before interest, tax and amortisation for the year to the end of June fell 7% to £375m as schedule costs rose for the World Cup. Reported pre-tax profit rose to £265m from £259m.

McCall, who joined from easyJet, said she would strengthen ITV’s position as an integrated producer-broadcaster showing its own programmes while growing its production business for the global market. She also announced an expansion of efforts to target consumers through competitions, merchandise, pay-per-view and live events.

McCall said: "ITV will be more than TV - it will be a structurally sound integrated producer broadcaster where we aim to maintain total viewing and increase total advertising revenue; it will be a growing and profitable content business, which drives returns; and it will create value by developing and nurturing strong direct consumer relationships, where people want to spend money on a range of content and experiences with a really trusted brand.”

First-half revenue rose 8% to £1.85bn driven by an 8% increase in external revenue to £1.59bn. Non-advertising revenue rose 14% to £958m and advertising revenue increased 2% to £890m.

Broadcasters are revamping their businesses in a fast-changing market skewed by the spending power of Amazon and Netflix and viewers watching TV when it suits them instead of tuning in to scheduled programmes.

McCall said ITV’s annual spending of £1.1bn was enough to support its broadcast business over the next three years. UK viewers still want British content that ITV can provide and formats such as Love Island can be sold to overseas broadcasters, she said.