ITV on schedule to report pre-tax profits of £300m

ITV is set to report on Wednesday that pre-tax profits almost tripled in 2010 thanks to a resurgent TV advertising market, with the cash-rich broadcaster expected to announce its intention to reinstate a dividend this year. Analysts forecast that ITV will report pre-tax profits of about £300m, on the back of a 16% surge in ad revenues thanks to hit shows such as Downton Abbey , The X Factor and the World Cup. It is expected to report that advertising in the first quarter of 2011 is up 10%. While there is an expectation that ad revenues could be up as much as 20% in April, thanks to a combination of the royal wedding and Easter, ITV will warn on tougher year-on-year comparatives from May onwards. The company's strong position – net debt will have more than halved to about £300m, with forecasts that it could be wiped out altogether by the year's end, and more than £700m in the bank – has led to speculation over how it might use its financial muscle. Possibilities include acquiring a production company to bolster its underperforming in-house production business, ITV Studios , which produces shows such as Emmerdale and Coronation Street . Possible big ticket targets include Midsomer Murders maker All3Media and Big Brother company Endemol. ITV may also increase its investment in programming, with its overdependence on Simon Cowell , who is attempting to split his focus between commitments in the US and UK, becoming an issue. ITV's online business is expected to report revenues of £20m, 2% of revenues, with management yet to announce a plan for the operation to achieve its target of substantially increasing digital revenues. A general improvement in the market is also thought to have significantly benefited ITV's pension deficit, which stood at £449m.