Ultimate magazine theme for WordPress.

ITV shares surge on bright outlook for advertising sales

0 13

ITV shares were on track for their biggest one-day rally since 2009 on Wednesday after the broadcaster said it expected the highest annual advertising revenue in its history, raising hopes that a protracted period of underperformance may be behind it.

The FTSE 100 media group forecast that the reopening of the economy would help it deliver a 24 per cent year-on-year rise in full-year ad sales, sending shares up 11.5 per cent in morning trading.

The UK’s biggest commercial free-to-air broadcaster reported total revenues of £2.79bn for the first nine months of 2021, 28 per cent higher than a year ago and 8 per cent higher than the pre-pandemic period in 2019.

ITV was hard hit by a collapse in advertising at the onset of the coronavirus crisis, which prompted it to scrap its dividend and accelerate cost cuts.

Even before the pandemic, however, ITV shares had come under pressure as the company battled to retain viewers in the face of competition from deep-pocketed streaming services such as Netflix.

Challenges remain for the company, whose shares are 28 per cent lower than five years ago despite gains of 38 per cent in the past year. “It’s hard to imagine that consumption of broadcast TV will not continue to decline,” said Sarah Simon, analyst at Berenberg.

But the trading update on Wednesday shows the company is making progress on its strategy under Dame Carolyn McCall, who joined from easyJet about four years ago.

McCall has led a push into digital services and expanded the company production arm ITV Studios, which makes shows for other broadcasters including Line of Duty and Vigil for the BBC.

Revenues from ITV Studios rose 32 per cent in the period to £1.19bn and the group said it had a “strong pipeline” of productions for clients in overseas markets including the US and Italy, as well as domestically.

Monthly active viewers of ITV Hub, the broadcaster’s online viewing platform, rose 22 per cent year on year to 9.6m. The company said consumers had been encouraged by a redesign. Revenues from video-on-demand advertising jumped 54 per cent.

ITV said it had struck an “extended and enhanced” five-year deal with Virgin Media 02. Under the arrangement, ITV Hub will be integrated into Virgin TV set-top boxes.

“By any standards ITV has had an outstanding nine months,” McCall said.

ITV, which has said it expects to reinstate a final dividend, plans to spend £1.16bn on programming next year, broadly in line with previous years, with a roster including the Fifa World Cup.

Total viewing of ITV channels fell 5 per cent in the nine-month period compared with a year earlier, which ITV said was against a tough comparative in 2020 when viewership was higher because of coronavirus lockdowns.

However, the share of viewing for the flagship channel, ITV, ticked up from 16.6 per cent to 17 per cent, helped by Euro 2020 in the summer and reality show Love Island.

Leave A Reply

Your email address will not be published.