ITV, the commercial television network, has received an upgrade from Standard & Poor's (S&P) rating services with its outlook moving to 'positive' from 'stable'.
S&P said the rating reflected its revised assessment of ITV's business risk profile to 'satisfactory' from 'fair', following steady and significant improvement at its broadcasting operations and solid performance at its content production business, ITV Studios.
The rating agency explained: "We revised ITV's business risk profile to 'satisfactory' because its overall audience and advertising market shares in the UK free-to-air TV market have stabilised and improved, and the company posted a sound EBITDA [earnings before interest, tax, depreciation and amortisation] margin that exceeded 20% over the last two years.
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"In addition, we see solid growth and margins at ITV's production arm, ITV Studios, which further diversify the business away from cyclical advertising revenues. We consider ITV's business risk profile to be in line with that of its main broadcasting peers."
ITV has been one of the best performers in the FTSE 100 in 2012 and is near year-highs.
In July, ITV disclosed half-year results that showed revenues rising by 10% to £1,130m, adjusted profits increasing by 15% to £235m and an interim dividend that was double that of 2011 at 0.8p per share. The company also revealed a strengthened balance sheet, with net cash of £92m.
Gross debt repayable was £499m at June 30th, having reduced by £281m since December 2011, primarily as a result of bond repurchases.
In July, it improved its financial flexibility by obtaining a committed £250m revolving credit facility, provided by a handful of long-term relationship banks, which at that time remained undrawn.
ITV's next trading update will be published on November 13th.
CM
