Jobs threat at ITV after profits plunge by 28 per cent

Aug 7 2008 Daily Record

ITV warned of a sharp fall in the advertising market as they announced half-year profits were down 28 per cent yesterday.

The news put fresh pressure on executive chairman Michael Grade, who is in the middle of a turnaround plan for the broadcasters.

Shares - already half their value of a year ago - plunged 5.8 per cent.

And Grade warned jobs will go. Reports claimed up to 600 of the firm's 6000 staff were under threat.

Grade said sales for next month "displayed a level of volatility we haven't seen" and added that the wider market was expected to fall by as much as eight per cent in the fourth quarter this year.

That compares with a market dip of one per cent during the eight months to August.

ITV reported underlying profits of £91million but, in another sign of deteriorating advertising outlook, the group wrote off £1.6billion from the value of broadcasting licences bought in 2000 and 2004.

That resulted in bottom-line losses of £1.54billion.

The former BBC chairman said the group's five-year turnaround strategy, launched after he joined at the end of 2006, was "dependent on the economy".

He said: "Our priority is to manage this cyclical downturn without jeopardising the turnaround strategy."

He said their ad revenue was up one per cent over all channels but fell two per cent on ITV1.

And he expected the figure to be down 20 per cent next month because of the economic climate and the impact of last September's Rugby World Cup.

ITV halved their dividend.