ITV plc has reported a significant increase in profitability for the fiscal year ending December 31, 2024, with pre-tax profits more than doubling to £521 million from £193 million in the previous year. This substantial growth is largely attributed to record performances by ITV Studios and effective cost-cutting measures.
Despite a 3% decline in total revenue to £4.1 billion, primarily due to lingering effects of Hollywood strikes on ITV Studios, the company's adjusted earnings before interest, taxes, and amortization (EBITA) rose by 11% to £542 million. This improvement reflects the operational gearing of the Media & Entertainment (M&E) segment, higher margins in ITV Studios, and the delivery of £23 million in cost savings.
Carolyn McCall, ITV Chief Executive, said: “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."
ITV Studios achieved record profits, delivering a wide range of new and returning programs and formats to a diversified portfolio of customers. Notable successes include "Mr Bates vs The Post Office," "Rivals," and "Fool Me Once." The division's adjusted EBITA increased by 5% to £136 million, with an adjusted EBITA margin of 15.7%, reflecting an increase in higher-margin catalogue sales and cost savings.
The Media & Entertainment (M&E) segment reported a 7% increase in revenue to £1.034 billion, with total advertising revenue up 10%, surpassing previous expectations. Digital advertising revenue, a component of digital revenue, grew by 17%. ITV's streaming platform, ITVX, continued its strong performance, with total streaming hours up 15% and monthly active users increasing by 17%.
Looking ahead, ITV anticipates good revenue growth in its Studios segment for 2025, though profit margins may be slightly lower due to a higher proportion of lower-margin scripted shows. The company also expects advertising revenue to face challenges due to new UK government restrictions on advertising less healthy foods and the absence of major summer sporting events.
Despite these challenges, CEO Carolyn McCall remains optimistic, highlighting ITV's progress in the evolving media landscape and the increased contribution of content production and digital channels to overall revenue, and said: “Our significant competitive advantages give us confidence that we will continue to deliver good growth in both ITV Studios and digital revenues, underpinned by the powerful reach and strong cash generation of Broadcast. And we are becoming a more resilient business with content production and digital now accounting for close to two thirds of our revenue. 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.”
In summary, ITV's robust financial performance in 2024 underscores the effectiveness of its integrated business model, strategic cost management, and successful content production, positioning the company well for future growth in a dynamic media environment.