Love Island and I’m A Celebrity… Get Me Out Of Here! push ITV’s profits up by record 50 per cent but shares plummet 18 per cent

Broadcaster ITV posted a near-50 per cent jump in annual profits this morning thanks to a record year for advertising revenues as the wider economy recovered from the pandemic.

The group behind hit shows including Love Island and I’m A Celebrity… Get Me Out Of Here! reported a 48 per cent surge in pre-tax profits to £480m last year.

Operating profits lifted 46 per cent to £519m, while ITV saw total advertising revenues rise 24 per cent to £2bn, marking the highest in its history.

Despite a stellar set of results, investors were left unimpressed with the announcement of ITVX, the UK’s first integrated advertising and subscription funded (AVOD/SVOD)  platform.

It promises exclusive new series launching online every week, as well as an upgrade option to a premium ad-free subscription tier, with access to partner content and BritBox.

However, the launch has left markets confused at what the exact unique selling point of the platform is, with some questioning whether paid subscriptions will be used, when viewers could simply wait for the ‘exclusive content’ to eventually make its way onto the linear channel.

However, ITV chief Carolyn McCall said ITVX “enriches the linear channel”, with the “familiarity of ITV, but the X part being the content that you wouldn’t expect from ITV .”

Aside from the mind-boggling ITVX, the broadcaster has pledged to invest around £1.23bn on content over 2022, rising to about £1.35bn next year, and said advertising demand had remained strong so far this year.

Whilst this seems pretty small compared to Netflix’s £10bn plus budget, McCall emphasised that ITV’s focus was on the UK rather than global.

“We don’t see this a great big play against Netflix. This is about us developing our subscription base”, she emphasised.

Looking forward, it expects ad revenues to rise by around 16 per cent in the first quarter, but for the following three months to be impacted by tough advertising comparatives and the Euros from June.

“With the success of ITV Hub, ITV Hub+, Planet V and BritBox we see an exciting opportunity to at least double our digital revenues to £750 million by 2026″, McCall said.