Downton’s high-profile fan proves studio is booming

Elizabeth Fournier
AFTER months and months spent out on the campaign trail supporting husband Barack Obama, no one could begrudge the newly elected First Lady of the United States a little downtime.

Particularly not ITV, which yesterday said it had been only too happy to send Michelle Obama preview copies of Downton Abbey, so eager was she to kick back and catch up on the third season of the channel’s flagship period drama ahead of its US release next January.

Of course it was also fantastic PR for the firm, which yesterday impressed investors with a four per cent rise in group revenues – driven largely by its in-house studio business, which has gained a legion of followers in the US.

Shows such as Gordon Ramsey’s Hell’s Kitchen and Downton helped the production unit grow revenues by 20 per cent and chief executive Adam Crozier now expects ITV Studios to report over £100m in profit in 2012 – more than enough to offset a dip in national advertising revenue (NAR) – inevitable after the BBC and Channel Four scored coverage of the summer’s Olympic and Paralympic Games.

A breakdown of the figures certainly doesn’t imply it’ll be an ongoing problem – while NAR was down 10 per cent and nine per cent respectively in the core-Olympic months of July and August, it recovered to just -1 per cent in September, and management expects the figure to be broadly flat for the full year.

Meanwhile chief executive Adam Crozier continues to impress with his cost-cutting prowess, no doubt learning from his experiences at the helm of Royal Mail to come in £10m ahead of his original savings targets for this year.

Shares in ITV jumped almost 10 per cent yesterday, bringing total gains over the past year to an impressive 44 per cent.

Endless Saturday nights filled with the X Factor may be getting repetitive, but ITV’s performance seems to have investors hooked for now.

Also reporting yesterday, Vodafone didn’t have quite such glamorous news for investors. A drop in service revenue of 9.8 per cent across southern Europe – not to mention a massive £6bn writedown, blamed on struggling economies in Italy and Spain – led to an overall revenue fall of seven per cent, and a loss for the first half of £1.88bn. Its share price over the past year tells a similarly gloomy story – down seven per cent compared to the FTSE’s gain of four per cent, with a 12.5 per cent drop just in the past three months.

But it’s not all bad news. Underlying profits actually rose 6.5 per cent over the six months, and boss Vittorio Colao’s decision to hold onto a stake in US service provider Verizon Wireless was finally vindicated late on Monday when it announced a dividend that would pay Vodafone £2.4bn, allowing it to instigate a £1.5bn share buyback that should help support the share price for the time being.

Elizabeth Fournier is news editor of City A.M. @ej_fournier

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