Highlights

• ITV paid a 3.3p final in May 2026 and has set a 1.7p interim for payment in November.

• Comcast's Sky will buy ITV's Media and Entertainment arm in a deal worth up to £1.6 billion.

• ITV launched a buyback of up to £100 million as an early return of the £950 million net cash proceeds.

• First-half Revenue rose 2% to £1.89 billion, while pre-tax profit increased 16% to £78 million.

Few Dividend stories come with a Takeover attached. ITV (LSE:ITV) is selling its broadcasting arm to Sky, keeping its production studios, and promising to hand back a large slice of the proceeds. The regular payout is small and steady, yet the real money is in the transaction. Here is how it fits together.

The ordinary dividends

A final of 3.3p went ex on 9 April 2026 and was paid on 21 May. An interim of 1.7p, unchanged from last year, goes ex on 15 October 2026 and is payable on 24 November. The total of 5.0p equals 7.51% of a share price of 66.6p. No Special Dividend has been declared, and the interim is the same size as the one paid a year earlier. Basic Earnings Per Share for the half were 1.5p and adjusted earnings per share were 2.2p.

The Sky transaction

Sky is acquiring ITV's Media and Entertainment Business for up to £1.6 billion, with completion expected in the second half of 2027. ITV receives £1.2 billion in cash, Sky's Love Productions business, and up to £200 million of further cash linked to 2027 Advertising performance. The company describes a net cash return of around £950 million, excluding the contingent element, and keeps ITV Studios. The deal is subject to regulatory approval.

The buyback

ITV announced a buyback of up to £100 million, run by an appointed bank, as an early return of part of the £950 million. It is expected to finish within nine to twelve months and no later than 9 July 2027. The balance of the net cash return has not been declared as a dividend, and no special dividend has been announced.

First-half performance

Group revenue rose 2% to £1,887 million, and statutory profit before tax rose 16% to £78 million, with adjusted pre-tax profit up 9% to £108 million. Media and Entertainment adjusted EBITA rose 37% to £48 million, helped by digital growth and World Cup advertising demand. ITV Studios revenue rose 2% to £912 million, but adjusted EBITA fell 9% to £97 million because of production slate phasing, with profit weighted to the second half.

Risks

Management says full-year guidance is on track, including a Studios Margin at the lower end of a 13% to 15% range, yet it acknowledges that macroeconomic headwinds remain. The contingent £200 million depends on 2027 advertising, and the whole transaction awaits approval. Once the broadcasting arm is gone, the dividend will rest on a Studios business whose earnings are skewed to the second half.

What happens to the dividend after a sale

When a company sells a large part of its business, its future earnings and its dividend capacity change. ITV (LSE:ITV) will keep ITV Studios, the production arm, while the broadcasting business moves to Sky. A smaller, studio-focused group may have a different pattern of profit, with earnings weighted to the second half. Investors should look at how the board describes its dividend policy after completion, because a lower base of earnings may support a different payout than the present 5.0p.

Buybacks versus special dividends

A buyback reduces the number of shares in issue and can raise earnings per share, while a special dividend gives cash to every shareholder. The board has launched a buyback of up to £100 million as an early step but has not declared a special dividend. For readers of LSE:ITV, this matters: a buyback benefits holders who stay invested through a higher share of the company, whereas a special dividend delivers cash at a set date. The balance of the £950 million is still to be allocated.

Advertising and studios

Broadcasting depends on advertising spending, which rises and falls with the economy and with major events, such as the World Cup that supported Demand in the first half. Studios earn money by producing programmes for broadcasters and streaming services, and their profit can be uneven because of production timing. The first-half fall in studios EBITA of 9% to £97 million came from slate phasing, which the company says will be weighted to the second half.

What to watch next

The 15 October ex-dividend date for the 1.7p interim has passed and the payment is due on 24 November. After that, regulatory approval for the Sky deal and the progress of the buyback will be the main points. Investors should also follow studio margins against the lower end of the 13% to 15% range and the board's comments on how the remaining cash will be used.