ITV, the commercial broadcaster, today promised to increase the cash return to shareholders this year by £200 million to £500 million as it admitted that revenues from advertising would slump by 4.6 per cent in the first half.
The British broadcaster, which has been persistently engulfed in takeover speculation and has already rejected at least two approaches, said the increased reward to shareholders means it will have returned £1.1 billion since it was created two years ago.
ITV was formed in 2004 out of the tumultuous tie-up between Carlton and Granada.
Shares in ITV, which dropped 30 per cent after a consortium led by Greg Dyke, the former director-general of the BBC, formally abandoned its bid, added 1.25p to 103.75p in an otherwise declining market this morning.
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ITV, which in March it told investors that it was reviewing its capital structure in a move that could see it take on substantial additional debt, pledged to make further returns to shareholders if structural change made this possible.
Charles Allen, the chief executive since the merger, also unveiled a raft of initiatives designed to cut costs by a further £100 million by the end of 2008 and increase revenues outside of the core ITV1 channel by as much as £1.465 billion.
“We continue to set ourselves aggressive targets,” Mr Allen said. “We have a renewed focus, a clear strategy and the right management team that will enable us to deliver increasing value to our viewers, advertisers and shareholders,” Mr Allen said.
The planned switchover to digital-only television in British households by 2012 has meant ITV1 has suffered a sustained decline in both advertisers and viewers.
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It has been trying to find ways of diversifying its revenue stream to benefit from digital, including launching new channels, increasing its investment in multi-channel programming and concentrating on more original content.
ITV has also increased its interest in the internet, snapping up the hugely popular Friends Reunited website last year.
All of this means that total revenues for the first half will be up an estimated 2 per cent compared with last year, ITV said.