ITV hands shareholders £100m returns after £1.6bn Sky deal
ITV has announced a £100m share buyback as part of its commitment to return £950m to investors following its blockbuster £1.6bn Sky deal.
The broadcaster said the “milestone” merger will “unlock significant value for shareholders,” as it posted a two per cent jump in revenue across the last six months.
Earlier this month, ITV agreed to sell its Media and Entertainment arm to Sky for £1.6bn, offloading its free-to-air TV channels and the ITVX streaming platform.
“This transaction will unlock significant value for shareholders, with a net cash return of around £950 million, excluding any contingent consideration, and continued ownership of an attractive, growing global content business in ITV Studios,” the firm said.
ITV Studios, which produces shows like Love Island and The Chase, is “well positioned to deliver above-market profitable organic revenue growth,” the board said on Friday.
The business’s profit will be weighted towards the end of the year, as ITV holds out hopes for revenue boosts from new seasons of The Gentlemen, Line of Duty and Vigil.
ITVX, the group’s streaming platform, delivered double-digit growth in the first half of the year, the group said, with advertising revenues buoyed by the World Cup.
Total advertising revenue jumped by eight per cent in the last quarter, as the Three Lions’ progress at the tournament attracted “strong” partnership demand and “supercharged” engagement on ITVX.
The streaming hub saw record viewing in the first half of the year, up 27 per cent, as digital advertising revenue increased by 13 per cent year on year.
ITV hits out at junk food ad rules
But the firm said it expects advertising revenue to slip in the next quarter due to “the current macro-economic headwinds”. ITV said it is still on track to meet its full year targets.
The group hit out at new rules over the promotion of so-called “less healthy foods,” which banned all online adverts featuring junk food and limited TV ads to beyond the watershed.
ITV said it is working closely with its advertising partners to “mitigate the impact” of these rules, and expects to take a £20m hit from the regulations in the first half of the year.
The broadcaster said the merger of ITV Media and Entertainment with Sky will complete at the end of next year, pending the outcome of a probe by the competition watchdog.
Sky and ITV have in recent weeks rushed to convince the Competition and Markets Authority (CMA) to approve the deal.
The CMA is investigating the merger regarding concerns over the shared advertising revenue of the new body.