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Declining advertising revenues and a lack of original programming has taken a significant chunk out of ITV's full-year profits.

In the 12 months ending December 31st last year the commercial broadcaster experienced a 19 per cent slide in underlying pre-tax earnings to £364 million.

The last year was especially traumatic for ITV, with a raft of programmes failing to impress viewers, ultimately leading to the departure of chief executive Charles Allen.

This in turn had a knock-on effect on the group's advertising revenue, which dropped £181 million to £1.49 billion against 2005's total.

But Mr Allen's successor Michael Grade, who defected from the BBC in November, today insisted that ITV remained a "hugely popular brand".

"This in turn enables us to extend our value chain with online distribution. These unique strengths in brand, content and distribution are cause for considerable optimism in our ability to deliver real value for our viewers, advertisers and shareholders," he said.

Mr Grade admits however that there is an inherent "lack of innovation" in the network's programming.

The former BBC chairman said: "On the programming side we must raise our creative ambition. We must be more innovative and take more risks. We must be more relevant and we must be ahead of audience tastes."

And Mr Grade added that he was continuing to enjoy his "stimulating and challenging" role at ITV.

"Having been in post for two months it is too soon to conclude definitive plans for the business, but generally I have developed more positive impressions than negative ones, and the latter are mostly within our control to remedy," he elaborated.