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“Normal service has been resumed,” commercial broadcaster ITV claimed today as it announced a raft of measures to bolster its balance sheet and said the slump in TV advertising could be ending.
The moves came the day after Sir Michael Bishop announced he would not become chairman succeeding Michael Grade by the end of this year. That left ITV looking for a new chairman and a new chief executive. Chief operating officer John Cresswell also said he will quit after 22 years with the Coronation Street and X Factor broadcaster when the new chief executive arrives.
But it was Cresswell who today said: “The actions we are announcing continue our work over recent months to strengthen the balance sheet, improve our debt maturity profile and proactively manage our pension deficit over the long term.”
He said of current trading: “Whilst we are not yet seeing a recovery in UK TV advertising, the trend is improving across the second half and into the fourth quarter. We continue to outperform the market and are on track to deliver the substantial cost savings we have set out.”
Cresswell again ruled out a rights issue. Tony Ball, the former Sky chief executive who failed to agree terms to become ITV chief executive last month, had talked of the broadcaster needing a £500 million rights issue to cut its £730 million overdraft. ITV today launched a £120 million bond issue which will not reduce its debt but moves its maturity to 2016. Analysts had been worried the broadcaster faced a “funding pinch” next year when some debt is due for repayment.
The company has also decided to shelve the sale of SDN, the digital terrestrial broadcasting system that carries many of the commercial services on Freeview. It bought it for £149 million in 2005, and had been looking for offers above £200 million.
Today it said it will keep SDN even though it received several offers. Instead, it will form a joint venture with the ITV pension fund, effectively mortgaging half the business to it which will guarantee capital and cash flow for the fund.
