Last checked at 
LONDON (Alliance News) - ITV PLC was vying with Standard Chartered PLC to be top gainer in the FTSE 100 Wednesday, after the broadcaster proposed a GBP250 million special dividend at 6.25 pence per share and raised its total ordinary dividend for 2014, as it posted results ahead of expectations and 2013.
The company proposed a final dividend of 3.3 pence, taking its total dividend for the year up to 4.7 pence from 3.5 pence. The company has committed to grow its full-year ordinary dividends by at least 20% per year over the three years to 2016.
The special dividend is increased from the GBP156 million it paid out in the previous two years. When questioned on the special dividend, Chief Executive Adam Crozier told journalists Wednesday morning that ITV felt it was in a position to both invest in its growth and reward shareholders.
ITV shares were quoted up 5.4% at 233.80 pence late morning Wednesday.
ITV posted a pretax profit of GBP605 million, up from GBP435 million, as revenue rose to GBP2.96 billion from GBP2.75 billion. Stripping out exceptional costs including acquisition, impairment, amortisation, net financing costs, restructuring and other tax adjustments, ITV posted a pretax profit of GBP712 million, up from GBP581 million, and earnings per share of 13.8 pence, up from 11.2 pence.
A consensus forecast of seven analysts provided by Morningstar showed analysts expected ITV to post an adjusted pretax profit of GBP669.40 million, and earnings per share of 13.06 pence.
Revenue growth was driven by a strong performance from broadcast and online, as the advertising market continued to improve in 2014 and ITV saw 6% growth in net advertising revenue. Online, Pay and Interactive revenue rose 30%. ITV studios revenue rose 9%, bolstered by acquisitions.
ITV Family's share of viewing was down to 22.0% from 23.1% in 2014, despite a boost from its broadcasting of World Cup matches in June, as the main channel saw lower audience share due to strong competition from the BBC, and ITV2 saw more competition from UK digital channels.
Schedule costs were up to GBP1.02 billion, compared to GBP983 million a year before, due to the World Cup and increased spend related to the launch of the new ITV Encore and ITV Be channels, as well as investment in the online business.
ITV said it expects to deliver "another strong performance in 2015 with continued revenue growth across all parts of the business."
It expects its ITV Family net advertising revenues to be up 11% in the first quarter of 2015, and up by between 4% and 7% in April.
ITV said expects its Online, Pay and Interactive revenue to grow in 2015, and will continue to invest in its ITV Player video-on-demand service.
The broadcaster also said expects its ITV Studios business to deliver around GBP100 million in revenue growth in 2015 on a constant currency basis, bolstered by acquisitions it completed in 2014.
It expects its total network programme budget to be around GBP1.04 million, reflecting its two new channels. The company will be investing heavily into its programming schedule for 2015 as part of its efforts to increase its share of viewing.
"As we look ahead to 2015, we remain focused on improving share of viewing. While still drawing strong audiences, some of our most successful shows are maturing. We will therefore continue to rejuvenate our schedule, creatively and commercially, increasing our investment in high quality content and seeking new ways to maximise the value of our airtime," ITV said.
The company no longer holds the live rights for the Champions League, after BT Group PLC snapped up those rights, but ITV will likely see a boost from its exclusive rights to the Rugby World Cup in September. When questioned about ITV's ambitions for sport, Crozier noted the recent Premier League rights auction, where costs rocketed up to GBP5.13 billion due to the rivalry between Sky PLC and BT.
Crozier said that the Premier League bidding was now beyond the level that any terrestrial broadcaster could afford, so whilst that might be beyond ITV, it will continue to pursue other sports-broadcasting rights that are coming up.
"ITV is now a high growth business with increasing emphasis on international content creation and distribution, and is demonstrably much stronger, both creatively and financially, than when we set out on our five-year plan. We remain firmly focused on our strategy and look forward to this year and beyond with enthusiasm and confidence," Chief Executive Officer Adam Crozier said in a statement.
Numis upgraded its rating on ITV to Buy from Add and lifted its price target on the stock to 275 pence from 260 pence on the back of what it called ITV's very strong final results.
Liberum reiterated its Buy rating on ITV; the company is its top pick in the sector and Liberum said the full year results provide it with further confidence in that view.
Liberum said ITV increasingly looks like a cash return story, citing the higher special dividend despite ITV confirming talks to buy Dutch media tycoon John De Mol Jr's production company Talpa Media Holding last week, which is rumoured to be valued at up to GBP500 million.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
Copyright 2015 Alliance News Limited. All Rights Reserved.
