Chief Executive Adam Crozier said he had been pushing the production business hard as a weak British economy dampened demand for advertising on its domestic channels.

He had seen "huge progress" in the unit, which had previously underperformed, without making the major acquisitions some analysts had expected when he took over in 2010.

"The great thing about having such strong organic growth (...) is we don't feel that we have to chase revenues," he told the Morgan Stanley Technology, Media and Telecoms Conference in Barcelona on Wednesday.

"We have very clear views on what good value looks like, and we have very clear views of what kind of companies we might like to have in terms of IP (intellectual property) and people."

He said ITV had looked at a number of large acquisitions, but they were not good value so he had settled for smaller deals, such as buying Norwegian independent producer Mediacircus in July and, last month, Finnish producer Tarinatalo, which makes the popular "Antiques, Antiques" show.

Tarinatalo also produces a domestic version of "Dragon's Den" where would-be entrepreneurs bid to win backing for their projects from leading business figures.

ITV's production unit would deliver profit of more than 100 million pounds ($160 million) in 2012, Crozier said, but that was only 30 or 40 percent of what it could be.

The company said on Tuesday that it expected net advertising revenue for 2012 to be broadly flat, allaying investor fears that the market had sharply deteriorated since the summer.

Crozier said all signs pointed to demand remaining flat.

"We do sense a bit more confidence returning but I think that what's so far held people back (...) is the slight concerns in the back of their minds about the euro and various other things that are out of people's control," he said. ($1 = 0.6293 British pounds)

(Reporting by Paul Sandle; Editing by David Cowell)

• A Permanent Economic Emergency