September advertising revenues at ITV will be “way down”, chairman Michael Grade warned today as he slashed the Coronation Street broadcaster's dividend in half and warned that more jobs will go in a new round of cost-cutting.

ITV shares fell 4.9p to 41.4p, within a whisker of their all-time low of 38p. That values the group at £1.6 billion. Two years ago, Goldman Sachs and Virgin Media were both considering bids valuing it at more than £5 billion.

Grade, who is now almost one year into his turnaround plan, said it would now definitely be a five-year project rather than the original three-to-five- year one he outlined last autumn.

He called for another £35 million of cost cuts but refused to say how many jobs that could hit.
“These are cyclical, not structural problems. We are hugely exposed to consumer spending and confidence and cannot avoid what is going on out there. September revenues will be down about 20%. But we have no cash problems whatsoever and our plans are still content-led with no cutbacks in programming. When the economy starts to recover the prize is still huge.”

Grade also increased speculation of a takeover bid for ITV, as he revealed that he and chief operating officer John Cresswell had “made ourselves available to anyone who wants to invest in our company.” He refused to say if this included any foreign media companies such as Big Brother maker Endemol, Channel 5 owner RTL or Italy's Mediaset, all of whom could have a tilt at Britain's top commercial broadcaster.

Speculation centres on the 17.9% stake BSkyB bought in ITV for almost £1 billion to scupper a takeover from Virgin Media. That stake is now worth just over £300 million. The Competition Appeals Tribunal will shortly rule on how much of it Sky must sell.

The Competition Commission ordered it to be cut to 7%. ITV also today effectively admitted its merger into one huge company was done at too high a price as it wrote-off £1.6 billion of goodwill paid for the takeovers of Anglia, Median and HTV in 2000 and the combination of Granada and Carlton four years later.

Although the writedown does not affect ITV's balance sheet, it swung the group from statutory pre-tax profits of £105 million to losses of £1.54 billion in the first half. On an underlying basis, profits fell 28% to £91 million. Revenues rose 3% to £1.03 billion.

Grade said: “We had a very steady eight months up to the end of August where we outperformed the whole TV market. But looking into September, the numbers are way down on a year ago. We did, of course, have the massive boost from the Rugby World Cup in September 2007.”

He said it was hard to forecast ad revenues past September but with strong schedules planned for the autumn ITV stations should “continue to outperform”. But he cut growth forecasts for ITV's own-produced programmes by £200 million to £1 billion by 2012 and pushed his target for online revenues of £150 million from 2010 to 2012.