Grade upbeat as ITV profits fall

Mr Grade says viewers are coming back to ITV's channels

Commercial broadcaster ITV has seen its annual profits for 2007 fall by 35% to £188m after a difficult year, but says its "turnaround plan is on track".

The figures are the second set of annual results to be released by ITV executive chairman Michael Grade.

The broadcaster has seen its shares face pressure over the past year. They hit new lows in January and February.

ITV has also been embroiled in the row about BSkyB's 17.9% stake in the firm, and advertising worries.

'Onscreen improvement'

But ITV says it has now stabilised advertising revenues, and that it has been able to increase its television advertising revenues by nearly 2% year-on-year for the first quarter of 2008.

ITV moved its late night news bulletin to 10pm again in January

The company, home to Coronation Street and the X Factor, also said that ITV channels as a whole delivered their first viewing increase since the early 1990s.

The viewing share of the "ITV family" of channels increased to 23.2% from 23.1% in 2006.

"Viewers that had deserted us are coming back," Mr Grade told the BBC.

"You are not going to get a 10% or 20% increase in viewing numbers. Given that we had 10 or 15 years of declining share I will take this increase."

The decline in advertising revenue at ITV1 bottomed out, and was down by 4% in 2007 compared with a 12% drop in 2006.

"With a much improved performance onscreen, we have countered the myth that ITV is a business managing decline," Mr Grade added.

He highlighted the show Britain's Got Talent as being one of ITV's successes of 2007.

Contract extension

"In my first year back at ITV, we put together a growth strategy for the business and strengthened the senior team," Mr Grade said.

The first priority for ITV was to stem the decline ITV chairman Michael Grade Check ITV's shares

"The first priority for ITV was to stem the decline. We did more than that, delivering an increase in viewing to the ITV family for the first time in over a decade."

Last week, it was announced that former BBC One controller Peter Fincham would join ITV as director of television, replacing Simon Shaps.

That news came as Mr Grade agreed to stay in his role until 2010, a year longer than expected. His contract was originally due to expire in 2009.

BSkyB row

In January, the government ruled that BSkyB must reduce its holding in ITV from the current level of 17.9% to below 7.5% and not take a seat on the ITV board.

On 17 November 2006, BSkyB announced it had spent £940m buying 17.9% of ITV, but ITV's share price has dropped since then.

The deal effectively prevented cable operator NTL - which has since been renamed Virgin Media - from launching a takeover bid for ITV.

Virgin boss Sir Richard Branson, consumer groups and the regulator Ofcom all opposed the purchase.

BSkyB is to argue that forcing it to reduce its ITV stake is unreasonable and a disproportionate remedy - particularly as BSkyB had said it would surrender its voting rights.