ITV, which last week appointed former BBC One controller Peter Fincham as director of television to replace Simon Shaps, said today that last year's pre-tax profits plunged by more than a third to £188 million.

Shares of the broadcaster, down 41 per cent in the past six months over UK advertising market concerns, rallied 1.8 per cent to 67.7p in early trading.

But executive chairman Michael Grade insisted that now is "the beginning of a revival" in the struggling broadcaster's fortunes.

His comments came as Five-owner RTL, which announced full-year results this morning, did not rule out an approach for ITV.

RTL chief executive Gerhard Zeiler said: "We are committed to Five, our channels, and there is absolutely nothing more to comment on that."

ITV's Mr Grade said today: "I am confident that the business is in better shape going into 2008. The launch of the new ITV1 schedule shows our commitment to innovation,"

"The first priority for ITV was to stem the decline. We did more than that, delivering an increase in viewing to the ITV family for the first time in over a decade. In my first year back at ITV, we put together a growth strategy for the business and strengthened theÁ senior team," he said.

Mr Grade this morning told Times Online that the impact of the creative changes he has made at ITV on the share price "will come" in time. He highlighted that he has a 3 to 5 year plan for the group. "Viewers are coming back to ITV. The share price is the share price," he said. ""We are exposed to a macro economic climate. I can't worry about it."

His upbeat comments came as net advertising revenues at the broadcaster's core channel ITV1 fell 4 per cent to £1.22 million. However, Mr Grade highlighted that the decline was substantially less than 12 per cent in 2006. Mr Grade also revealed that the group has some visilbility on net advertising revenues for April 2008 at ITV1, which is down in the region of 5 per cent. He added that net advertising revenue at ITV1 was down 0.5 per cent in the first quarter.

“Following steep declines in 2006, the performance of the ITV1 schedule was more stable in 2007,” he said, mentioning the success of shows including Britain’s Got Talent, Primeval and Kingdom, which all return to the schedule in 2008.

Mr Grade said he has set a revenue target of for the company of 3 to 5 per cent compound annual growth to 2010, rising to 5 per cent to 2012. He added that the global content business aims to double its annual revenues by 2012 and the group plans to deliver £150 million of annual internet revenues by 2010.

He also alluded to the fact that OFT confirmed its intention to review the contract rights renewal (CRR) mechanism which has applied to the sale of ITV1 advertising since 2003.

"Our improved on-screen performance in 2007 has mitigated the worst effects of CRR. In a rapidly changing market, ITV still remains unduly restricted: ITV now faces competitors who didn't even exist in 2003," said Mr Grade.

ITV said that net advertising revenue at its digital channel was up 33 per cent to £209 million.

Mr Grade this morning spoke of the appointment of Mr Fincham as director of television. "Peter's track record at BBC1 was phenomenal. A lot of his shows are still giving us grief in the schedule," said Mr Grade.

Mr Grade added that his recent decision to remain in the executive chairman role for another year was, in part, to drive speculation away from who would become the group's next chief executive. The most likely internal candidates are Dawn Airey and Rupert Howell, who were both recently appointed to the board.

Speak of his time at ITV, Mr Grade added: "I am enjoying every minute of it...It has been an exciting ride, although there are one or two things I could have lived without, such as the phone problems."

Richard Hunter, the head of UK Equities at Hargreaves Lansdown Stockbrokers, said: "It is still relatively early days, but there are some glimmers of hope that Grade's tenure may have arrested ITV's previous decline."

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