MediaCity move will ramp up costs for ITV

ITV’s planned move to MediaCity in Salford will contribute to a sharp rise in capital expenditure from £28m to £80m this year.

In its full-year figures, which revealed a trebling of profits to £321m, the group said the move would be responsible for the rise along with investments in technology.

ITV signed up to MediaCity in December, a decision that will require the reconstruction of the Coronation Street set on a brownfield site next to the Imperial War Museum North. It will move to the new site next year.

In its results the group said ad revenues grew by 16%. However it admitted this was down to shows such as Coronation Street and X Factor and it needs greater consistency across the schedule. ITV1’s share of viewing was down by 4%.

In the year to December pre-tax profits – after stripping out impairments and exceptionals – jumped from £108m to £321m on revenue of £2.06bn, up 10%. It will pay a dividend in July.

Despite the profits surge the group said it was continuing to seek greater efficiencies and expects to shave £15m off its cost base this year. ITV saved £40m during the year which, together with improved profits, helped reduce net debt from £612m to £188m.

Chief executive Adam Crozier said: “Last year we set out a comprehensive five year plan for the transformation of ITV. In this first phase, our outperformance of the television advertising market – together with the actions taken to reduce the Group’s cost base and the focus on cash generation – have delivered substantial debt reduction and a sound financial platform for the challenges ahead.

“But whilst the recovery in television advertising is clearly very helpful, it also serves to remind us just how volatile this market can be. That is why we remain fully focussed on delivering our five year Transformation Plan to ensure that we have a more balanced and robust business going forward.

“Our objective is to continue to outperform the TV advertising market, to invest in technology and our online capability, as well as our content business through the creative renewal of ITV Studios.  We remain committed to our strategy of creating great content, delivering and exploiting it across multiple platforms and selling it internationally.”