Newspaper article The Evening Standard (London, England)

ITV Is Sitting Pretty, but Problems Lurk

Newspaper article The Evening Standard (London, England)

ITV Is Sitting Pretty, but Problems Lurk

Article excerpt

Byline: Gideon Spanier

AS ITV's Adam Crozier prepares for his fifth annual meeting as chief executive next Wednesday, he can claim he deserves his PS8.4million pay and bonus. ITV has been on a golden run since the ex-Royal Mail boss joined in 2010 with a five-year "transformation" plan, after Michael Grade's exit in the recession.

Annual profits have nearly doubled to PS435 million during Crozier's tenure. The dividend has been restored and keeps rising. Net debt has been wiped out despite Crozier's buying a string of production firms including US reality TV company Leftfield for $360 million (PS212 million) today. And the share price is up nearly fourfold to almost 200p, valuing the company at PS7.5 billion.

"Adam has done very well in an absolutely straightforward 'how to manage a company' way," says ex-Channel 5 boss David Elstein.

Crozier's strategy has been to reduce reliance on advertising. He expanded programme-making arm ITV Studios, which sells shows to other broadcasters, and invested in online, niche pay-TV channels and gaming. But his arrival also coincided with an economic upturn and a renewed belief among advertisers that free-to-air TV works. No other UK commercial broadcaster can reach an audience of more than 10 million.

On-screen success with dramas such as Downton Abbey, Broadchurch and Mr Selfridge has helped as Crozier wisely kept on creative supremo Peter Fincham. ITV's share of viewing rose last year for the first time in 10 years.

The toughest question Crozier and chairman Archie Norman are likely to face at the annual meeting is about breakfast programming. Good Morning Britain, which replaced failed GMTV successor Daybreak last week, has had mixed reviews. Even star signing Susanna Reid sounded apologetic yesterday during an 8.10am feature about a children's potty with a tablet-style TV touchscreen to keep a toddler happy.

Leaving aside jokes about ITV's need to appeal to younger viewers, investors should ask where The Only Way Is Essex broadcaster is heading next, as Crozier's five-year plan nears its end.

Analysts at Barclays, Berenberg and Investec have all suggested ITV looks "fully valued". …

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