Key Highlights

  • ITV PLC (LSE:ITV) is a FTSE 250 constituent with a Dividend Yield of 7.51%.
  • The full-year dividend for 2025 was maintained at 5.0p per share, including a 3.3p final.
  • The 2026 Interim Dividend was maintained at 1.7p per share, about £60m.
  • ITV agreed to sell its Media & Entertainment Business to Sky for up to £1.6bn.
  • ITV plans to return about £950m to shareholders, starting with a £100m buyback.
  • ITV's dividend policy remains unchanged until the deal completes, expected in the second half of 2027.

Overview of ITV

ITV PLC (LSE:ITV) is the UK's largest commercial broadcaster and a global content producer through ITV Studios. Its Media & Entertainment division includes the free-to-air ITV channels and the ITVX streaming service. ITV Studios makes shows such as I'm A Celebrity and dramas like Mr Bates vs The Post Office.

The 7.51% yield reflects a maintained 5.0p dividend and a share price that has struggled amid structural declines in TV advertising.

Latest Results

For 2025, ITV reported pre-tax profit of £338m on Revenue of £4.12bn, with adjusted EBITA of £534m, ahead of expectations. For the six months to 30 June 2026, total revenue rose 2% to £1.89bn and pre-tax profit increased 16% to £78m. Advertising revenue rose 3% in the half and 8% in the second quarter, boosted by the 2026 FIFA World Cup. New rules on advertising less healthy foods had a roughly £20m impact. Media & Entertainment adjusted Earnings rose 37% to £48m.

The Sky Transaction

On 6 July 2026, ITV agreed to sell Media & Entertainment to Sky, owned by Comcast, for up to £1.6bn: £1.2bn in cash, Sky's Love Productions valued at £200m, and up to £200m linked to 2027 advertising performance. The deal includes a £2.1bn content Supply agreement over 2028 to 2032. Completion is expected in the second half of 2027, subject to Competition and Markets Authority review and a possible public interest intervention.

Dividend and Capital Returns

ITV maintained its 2026 interim dividend at 1.7p and said its dividend policy remains unchanged until completion. It plans to return about £950m to shareholders, beginning with a £100m buyback to be completed within nine to 12 months.

Dividend Cover

With adjusted earnings well above the 5.0p dividend, the payout is covered. After the sale, ITV will be a pure-play content business, and the future policy will be set out at a Capital Markets day before completion.

Future of ITV Studios

ITV Studios will become a standalone global content producer, supported by the Sky supply agreement. Its revenue and margins are weighted to the second half of the year, with good visibility on deliveries.

Advertising Backdrop

ITV's advertising revenue benefited from World Cup Demand in 2026, and the company reported strong, profitable digital revenue growth within Media & Entertainment through ITVX. Chief executive Carolyn McCall said ITV remains on track to deliver full-year guidance, including good revenue growth in ITV Studios. Until the sale completes, these trends support cash generation and the dividend.

Content Spend Discipline

ITV expected total content spend of around £1.225bn in 2026 and has been optimising spend to reflect changing viewer habits. Cost discipline protects margins and the cash available for shareholders.

Love Productions

As part of the deal, ITV will gain Love Productions, the maker of The Great British Bake Off, strengthening ITV Studios' portfolio of formats with global appeal.

Risks

Risks include regulatory delays to the Sky deal, weaker advertising before completion, and uncertainty over the post-deal dividend policy.

Market Sentiment

Analysts welcomed the deal as unlocking value, though the reaction was limited because the price had been expected. The buyback and capital return plan have supported sentiment.

How ITV Fits an Income Portfolio

ITV offers a covered dividend now plus a large capital return later. Income investors should watch how dividends are set after the sale.

Dividend Sustainability Scorecard

  • Dividend: 5.0p, interim held at 1.7p.
  • Capital return: about £950m planned, £100m buyback started.
  • Cover: earnings comfortably above dividend.
  • Deal: completion expected H2 2027.
  • Key risk: regulatory approval and post-deal policy.

What Investors Should Watch

Watch CMA progress, the capital markets day, advertising trends and Studios performance.

Is the 7.51% Yield Sustainable?

ITV's 5.0p dividend looks sustainable until the deal completes, backed by earnings and a large capital return. LSE:ITV suits investors seeking income plus special capital returns.