ITV announced a slide in profits yesterday, but hailed signs of recovery after the performance of its flagship ITV1 channel stabilised.

Chairman Michael Grade, who joined the group from the BBC in January, said the ratings decline slowed during the first half of the year, while the advertising environment had also shown some recovery signs. But pre-tax profits continued to fall, dropping 39 per cent from £173m last year to £105m in the six months to the end of June, as the company took a hit from the loss of revenues from the suspension of its ITV Play channel and a five per cent fall in advertising revenues.

However, the group said its performance at ITV1 had improved after it regained audience share with a series of new shows, including the sci-fi drama Primeval.

ITV also pointed to further growth in the next six months through programmes such as its Rugby World Cup coverage and the return of X Factor and I'm A Celebrity Get Me Out Of Here.