ITV admitted yesterday that advertising revenues on its main channel were down 8 per cent in the first half of the year, but promised more cost-cutting and £200 million extra cash for investors to help to maintain the broadcaster’s credibility in the City.

The new figures, which included cutting £60 million from children’s, sports and regional programme spending, were part of relaunch aimed at analysts — the first time that the broadcaster has presented to the City for two years.

ITV’s shares gained 2¾p to 105¼p. While City analysts welcomed some of the efficiency savings, several said that there was not enough to change their recommendation. The broadcaster remains under pressure to improve the performance on ITV1.

One analyst, who asked not to be named, said: “There were positives in terms of the increased return for shareholders, a stronger than expected revenue performance and in cost savings. But none of these will be enough to change the fundamental perception of the stock.”

Where ITV did surprise was in announcing that overall revenues were up by 2 per cent in the half, reflecting 42 per cent growth in the company’s digital channels to £69 million, a 24 per cent improvement in sponsorship at £21 million and a 5 per cent gain in production income at £125 million.

However, rival broadcasters were relieved to hear that there were no major new initiatives. ITV did promise to launch a new digital channel, a version of ITV2 broadcast with a one-hour delay, but there was little publicly available detail as to the company’s internet strategy or other new developments.

Instead, ITV promised to save £100 million a year by the end of 2008. This will come through £40 million of cutbacks in overheads and saving £30 million from the sports budget by trimming back spending after the World Cup.

The remaining £30 million comes after Ofcom, the communications regulator, agreed to allow ITV to cut back on children’s and regional programming.

ITV also promised to attain a 38.5 per cent share of advertising in 2012, only slightly down from the 42 per cent achieved at the end of 2005. The figure amounts to a pledge to advertisers that it will remain the best way that they can reach a mass audience of any media in the country.

The £200 million extra cash for shareholders comes on top of the £300 million promised earlier this year.

The £500 million total money is a sop to investors after Greg Dyke’s unsuccessful takeover approach in the spring, although it is less that the £1 billion that had been speculated on at the time.

Mr Dyke had teamed up with Apax Partners and Goldman Sachs to try to take advantage of ITV’s light debt load to mount a leverage buyout. This approach was rejected by the board, partly because it exposed the broadcaster to too much risk.

That point was yesterday reiterated by Fitch, the credit rating agency, which immediately downgraded ITV by one notch to BBB on the back of the increased buyback.

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