Upbeat ITV toasts rising profits

ITV has the big shows, but it is facing stiff competition

ITV has reported a jump in half-year profits despite a fall in advertising revenues at it flagship ITV1 channel.

Britain's biggest commercial broadcaster said its pre-tax profits for the six months to the end of June were £205m ($378m), from £128m in 2004.

However, ad revenues at ITV1 - whose top shows include Coronation Street and The X Factor - were down 3.4%.

The news came as ITV said it planned to team up with the BBC to launch a free-to-view satellite TV service.

The service, to be called Freesat, will cater for viewers unable to receive the BBC's Freeview digital coverage and will rival dominant pay-TV provider BSkyB.

'Diverse broadcaster'

Freeview continues to be the digital platform on which ITV performs best Charles Allen, ITV chief executive ITV and BBC plan BSkyB rival Check ITV's share price

ITV has faced tough competition during the summer, as many ITV1 viewers switched to rival offerings from Channel 4 including Big Brother and Lost.

But chief executive Charles Allen said the rise in half-year profits showed "very clearly that ITV has rapidly come of age as a balanced and diverse broadcaster".

The company, which was formed last year from the merger of commercial broadcasters Carlton and Granada, said the jump in profits came mostly from a reduction in the licence fees it pays the government.

Signs of improvement

Despite the fall in ad revenues at ITV1, the company said that the advertising market was showing signs of improvement in the third quarter of the year.

ITV is keen to keep as many viewers as possible watching free TV, where it faces less competition than in the pay-TV sector.

"Freeview continues to be the digital platform on which ITV performs best. It is therefore a strategic objective for us to support the growth of Freeview," Mr Allen said.

Rumours surrounded ITV recently that the company could become the target for a takeover bid from US media giant Time Warner - sending its shares soaring.

In Wednesday afternoon trading on the London Stock Exchange, shares in ITV were up almost 1% at 115.5 pence.