ITV pins its hopes on Kangaroo

After a £91m drop in profits, ITV is hoping Kangaroo and the CRR will improve its current situation.

ITV, which issued its half-year results this week, is hoping that regulator decisions on the future of the online service Kangaroo and the Contract Rights Renewal mechanism will improve its fortunes.

The broadcaster said it expects Kangaroo, also backed by Channel 4 and the BBC, will launch in "early 2009". The timing has been put back by a Competition Commission investigation that ITV hopes will be finished by January. Michael Grade, the executive chairman, also said he was hoping for a "sense of direction" on Ofcom's CRR review by September.

Announcing a 28 per cent drop in profits to £91 million for the six months to June, ITV has caved in on the terms of its "turnaround strategy". Its global content revenues target of £1.2 billion by 2012 has been reduced to £1 billion. Its online revenue target of £150 million has been put back two years to 2012.

The broadcaster said its ad revenues for the six-month period were down 1 per cent, but that September ad revenues fell by 20 per cent because of a tough year-on-year comparison with 2007, when the Rugby World Cup was broadcast in September.

Shares in ITV, which was also faced with a one-off £1.5 billion write-off, due to the mergers which created the company, tumbled to 42.7p.

ITV said it would make an additional £35 million in savings on top of the £81 million already announced.

However, ITV expects the upcoming series of The X Factor to bring in large audiences, thus improving its fortunes for the second half of 2008.