LONDON -- This morning, ITV (LSE: ITV.L) shares jumped 9% to 94.6 pence at the time of writing, following an interim management statement that impressed the market.
The update reported that total external revenue increased by 4% to 1.57 billion pounds, compared with 1.52 billion pounds in Q3 2011. Non-net advertising revenues were up 15% from 633 million pounds at the same time last year to 730 million pounds, which the company said was driven by ITV Studios. This, itself, is "trading strongly," as total revenue shot up 20% to 498 million pounds from Q3 2011's figure of 416 million pounds.
The strong performance has been led by a transformation plan, which continues to drive growth at ITV. Chief executive Adam Crozier commented: "We have made further progress in reshaping and rebalancing ITV to ensure the business is more robust both commercially and creatively."
Crozier went on to state:
We expect ITV Studios to report over 100 million pounds of profit in 2012, and the number of new commissions and recommissions already secured for 2013 gives us confidence that there will continue to be good underlying growth in the Studios business.
The economic outlook remains uncertain and we continue to see monthly volatility in the U.K. television advertising market, but the underlying trends have not changed. Over the full year we expect ITV Family NAR to be broadly flat and that we will again outperform the television advertising market.
The company has focused on costs as part of the restructuring and reported that total cost savings are expected to reach around 30 million pounds for the full year, which is 10 million pounds ahead of the original target. Crozier also pointed toward ITV's positive net-cash position of 90 million pounds, while the company made moves to strengthen for the future by acquiring the Finnish independent producer Tarinatalo on Oct. 8 and the U.K. independent production company SO Television on Aug. 30.
Investors will be encouraged by ITV's continued growth -- especially those who "caught the falling knife" when the company's share price hit a low of 17.5 pence in the depths of the financial crisis back in 2009. It has since grown fivefold, and shareholders who spied an opportunity to grab a slice of the company when it was shunned by the market will be happily sitting on a tidy gain today.
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