ITN turns profits up by 49%
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Cost controls, a new contract and higher revenues from ITV and Channel 4 helped to push operating profits at the news producer ITN to £8.1m in 1994, up from £5.6m a year earlier.
"The new cost-cutting regime is certainly beginning to show through in our results," Martyn Wheatley, the finance director, said. In recent years ITN has cut staff and streamlined news-gathering and production activities. Last year's results also reflected the income from a two-way contract to share news programming with NBC, the US television network.
ITN's core business is to supply ITV channels and Channel 4. The company has recently branched out into non-news production, and is seeking further international contracts for news distribution.
The growing number of cable channels in the UK, and the prospect of a new terrestrial service, Channel Five, may increase demand for ITN's news services.
But the company is still best known for its flagship national evening broadcast, News at Ten, with Trevor McDonald.
The ITV contract, established by the watchdog Independent Television Commission, is for 10 years from 1993; Channel 4's agreement with ITN, a commercial contract over which the ITC has no direct control, is reviewable at the end of this year.
Michael Grade, Channel 4's chief executive, is considering alternative sources of supply for news programming.
The ITC can decide whether to accept bids for alternative supplies of news programming for ITV at any time during the 10-year contract.
"Certainly we would look at any submission," a spokesman said. "But no one has declared an interest."
The ITC will, however, be reviewing ITN's controversial ownership structure at the end of the year unless the Government introduces changes to media cross-ownership rules.
According to existing regulations, no ITV licence holder can own more than 20 per cent of ITN. However, as a result of the takeovers by Carlton Communications of Central Television and by Granada Group of LWT, Carlton and Granada each ended up with 36 per cent of ITN. The news-gathering and distribution company Reuters holds 18 per cent, while Scottish Television and Anglia Television each have 5 per cent.
The ITC agreed to wait until the end of 1995 before obliging the companies to bring their shareholdings back into line, to allow time for regulatory changes to be finalised.
The ITC has recommended that the 20 per cent ceiling on ITN shareholdings be retained but that a second regulation limiting small ITV companies from collectively owning more than 50 per cent of ITN be dropped.
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