ITV made a loss of £104m in the six months to 30 June and has sold Friends Reunited to DC Thomson company Brightsolid for £25m – taking a hit of £145m.
The sale came on the back of the commercial broadcaster’s half yearly report, which many had expected to coincide with the naming of a new chief executive. However, no such announcement was made.
Friends Reunited was bought by former ITV chairman Charles Allen four years ago for £170m as part of the broadcaster’s push into social networking. But it was soon overtaken by sites such as Facebook, which did not charge members for a subscription.
The sale, overseen by Credit Suisse, was finalised earlier this morning. Beano publisher DC Thomson also owns The Evening Telegraph, The Sunday Post and The Courier.
Speaking this morning, ITV executive chairman Michael Grade said that while the £170m price tag had been “regarded at the time as a good price”, £25m was now the “best price [ITV] could get”.
Grade distanced himself from the social media site, emphasising that the current management team had not been responsible for its purchase.
He added that the digital viewing market and audience expectations had changed due to catch up services like the BBC iPlayer, and that Friends Reunited “doesn’t fit our strategy”.
ITV’s advertising revenues are forecast to be 12% down for ITV between July and September, ahead of the overall market decline of 15%, before recovering to record a drop of 7% in September.
Grade said that more than £275m had disappeared from the TV advertising market over the past six months, which was responsible for the loss posted by the broadcaster.
But he praised the strength of programming on the network, pointing out hit shows such as Whitechapel, Harry Hill’s TV Burp, Coronation Street and Britain’s Got Talent as key examples of content that would help drive the channel’s recovery.
“My job has been to manage this business through this terrible recession without damaging the core business,” he said.
“As a result, we are positioned exceptionally well for when the market recovers”.
New chief exec
The sales of SDN and Screen Vision US were making “good progress” as was the search for the new chief executive, Grade added.
But he refused to be drawn into revealing when a new executive would be announced, saying that his successor would be in place by the end of the year.
Overall, ITV reported a loss of 1.8p per share, and group revenue was down from £1031m to £909m for the six months to June 30.
Operating EBIDTA pre exceptional items was reduced from £121m in the first six months of 2008 to £46m for the same period this year. Cash flow increased from £117 to £168m.