ITV has launched a £100 million share buyback as part of its broader commitment to return £950 million to shareholders following its landmark £1.6 billion agreement with Sky, the Comcast-owned pay television operator.

The broadcaster described the transaction as a "milestone" merger that will "unlock significant value for shareholders." The announcement accompanied ITV's half-year results, which showed a two per cent increase in revenue over the preceding six months.

Earlier in July, ITV agreed to sell its Media and Entertainment division to Sky for £1.6 billion, transferring ownership of its free-to-air television channels and the ITVX streaming platform. The deal would leave ITV focused primarily on ITV Studios, its production arm, positioning the company as a global content producer while its broadcast channels move under the ownership of Britain's largest subscription television provider.

"This transaction will unlock significant value for shareholders, with a net cash return of around £950 million, excluding any contingent consideration, and continued ownership of an attractive, growing global content business in ITV Studios," the company said in a statement.

ITV Studios, the production arm behind programmes such as Love Island and The Chase, is "well positioned to deliver above-market profitable organic revenue growth," the board said on Friday. The division's profitability is expected to be weighted toward the second half of the year, with ITV anticipating revenue gains from new seasons of The Gentlemen, Line of Duty, and Vigil.

ITVX, the company's streaming platform, recorded double-digit growth during the first half of the year, supported by advertising revenues bolstered by World Cup coverage. Total advertising revenue climbed eight per cent in the most recent quarter, as the England men's team's deep run in the tournament drove "strong" partnership demand and "supercharged" engagement on ITVX.

The streaming service posted record viewership in the first half, rising 27 per cent, while digital advertising revenue grew 13 per cent year on year.

ITV Criticises Junk Food Advertising Restrictions

However, ITV cautioned that advertising revenue is expected to decline in the coming quarter owing to "the current macro-economic headwinds." The group reiterated that it remains on track to meet its full-year targets.

ITV criticised new regulations governing the promotion of so-called "less healthy foods," which prohibit all online junk food advertisements and restrict television adverts for such products to post-watershed hours. Food and drink ranks among the largest advertising categories for UK commercial broadcasters, and the restrictions form part of government public health measures aimed at reducing childhood obesity.

The broadcaster said it is working closely with advertising partners to "mitigate the impact" of the rules and estimated a £20 million financial hit from the regulations in the first half of the year.

The merger of ITV Media and Entertainment with Sky is expected to complete at the end of next year, pending the outcome of a Competition and Markets Authority (CMA) investigation.

Sky and ITV have in recent weeks moved to persuade the CMA to approve the deal. The regulator is examining the merger over concerns related to the shared advertising revenue of the combined entity.