anybody have thoughts on itv

Blue-Chip Movers

Investors switched on to ITV shares today after Ofcom announced a cut in the light "entertainment" channel's annual licence fee that was larger than the market expected. the stock added 6.5p to 122.5p. Under the new terms for ITV 12 licences, which included GMTV, it was estimated that payments for 2005 will be less than 80 million pounds - a fall of 135 million pounds compared with total 2004 payments of 215 million pounds. A cut of around 90% had been factored in the market. the review of fees was prompted by the penetration of relatively new digital channels. Following the announcement, CSFB said that its previous forecast of license costs was 110 million pounds. The actual cut in the fee, the broker calculated, would equate to roughly a 10% upgrade to pre-tax profits. It thought this should help mitigate recent pressure on earnings from the weak advertising market. It maintained its "outperform" stance.

Back in London, ITV was the top performer, up over 5 pct, or 6-1/2 pence at 122-1/2, after Ofcom made a bigger-than-expected cut to the broadcaster's annual licence fee.

The communications industry regulator cut ITV's licence fee to less than 80 mln stg for 2005, down from 135 mln stg last year.

In response, ABN Amro reiterated its 'buy' advice with a raised price target of 136 pence, up from 129, while UBS stuck to its 'buy' advice.

Ofcom has announced the proposed terms of ITVs license renewal and as we had hoped the terms are favourable. The overall license cost falls from c175m under the old terms to c 77m under new proposed terms highlighting the perception that ITV is dealing with a benign regulator. We expect ITVs earnings to improve over the next few years enhanced by merger cost savings and the lower license fees and despite the strong rise in the share price since the beginning of the year we remain buyers of the shares.

This is now looking very good for a bid soon!