ITV plans to hand over nearly £370m to shareholders, despite the fact that its annual profits have crashed due to an advertising slump.
At its annual results, chief executive Dame Carolyn McCall said that ITV’s pre-tax profits for the 12 months to the end of December had tumbled, plunging 61.5 percent to £193million, due to what she called the “challenging” macroeconomic environment. Its revenues fell 2.8 percent to £3.6billion.
Despite its falling profits, McCall was bullish. As a sign of her confidence in the business, she kept its final dividend at 3.3p per share, a payout worth £135million to investors. ITV will also spend £235million of the £255million it received from selling its 50% stake in streaming service BritBox to the BBC on share buybacks to reward its shareholders.
ITV’s profits were hit by a combination of a 15% decline in TV advertising revenues, the US actors and writers strike of last summer affecting its production arm, acquisition costs, and legal fees, which include the cost of the Phillip Schofield investigation.
McCall said that with ITV’s cost cutting bearing fruit earlier than anticipated, and its production and streaming businesses, growing, the broadcaster is “well placed to grow profits from here”.
Another company planning an investor payday is Aviva. The insurance giant plans to return £910million to shareholders, after swinging from an £2.2billion pre-tax loss to a £1.7billion profit.
Chief executive Amanda Blanc attributed Aviva’s improved annual results to a combination of rising sales and lower costs. Its UK and Ireland general insurance business, which includes home and motor, saw premium growth of 16 percent, while Canada was up 10% and protection and health sales rose 16 percent.
As a result, Aviva hiked its final dividend by 7.7 percent to 22.3p per share, a £610.9million payout that shareholders will receive in May. Blanc promised that future dividends will see mid-single digit percentage increases going forward and also unveiled plans to buyback £300million of its shares to push the value up of those remaining in circulation.
