ITV rated a ‘buy’ as it pays a second successive special dividend of £161m

26th February 2014

ITV has been rated a solid buy by brokers at the Share Centre following this morning’s announcement of the second successive special dividend of £161 million.

Graham Spooner, investment research analyst at The Share Centre said: “This morning ITV reported solid figures with non-advertising revenue up 17% to £1.21bn, an area of the business that has been boosting performance in recent years. ITV’s studios and production arm has been performing well and the company has seen growth in the division both organically and through acquisitions. Investors will be pleased to hear that acquisitions are likely to continue in 2014 following a successful strategy in recent years.

“Another special dividend was announced today along with a 35% increase in the full year dividend making the yield more attractive for investors. As the benefits of the company’s turnaround story continues it is encouraging to see cash being returned to shareholders.

“The share price is down this morning, possibly as investors take profits, but also perhaps due to the short term guidance being slightly below analyst estimates and the company making additional investments for the year ahead for new programmes and a channel launch.

“We continue to recommend investors ‘buy’ ITV. The growth prospects continue to look promising and the improving dividend stream is attractive for investors. Management remain cash and cost conscious, however, investors should be aware that this is a company that has seen a significant rise in its share price in recent years on the back of its turnaround.”

Justin Cooper, CEO of Shareholder Solutions, Capita Asset Services, a firm which monitors UK dividend payouts, said:

“It has been another bumper year for Britain’s largest free-to-air commercial broadcaster, after posting a 9% rise in 2013 revenues, and rewarding shareholders with a second consecutive special dividend, this time of £161m. ITV accounted for 12% of all the media industry’s dividend payouts in 2013, and sits in the sector’s top five, with rival broadcaster BSkyB leading the way. ITV may only be a minnow in the overall UK dividend landscape paying £302m in 2013, but back to back specials and a 35% rise in the share price shows it still has the X-factor.”

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