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ITV share price down 4% as revenues slide amid advertising woes

The British broadcaster saw its share price take a tumble on Wednesday after its Q1 results showed a dip in revenues driven by a decline in advertising.

ITV Source: Bloomberg

ITV saw its total external revenue fall 4% to £743 million, down from £772 million in the same period a year ago, with growth in ITV Studios revenue and 22% growth in video on demand (VOD) revenues offset by the decline in spot advertising impacted by the timing of Easter and economic and political uncertainty.

Its results led to ITV’s share price falling more than 4% on Wednesday morning, with the stock sitting at 125p a share as of 10:00am GMT.

Despite the figures disappointing investors, ITV’s results for the first three months of the new financial year were in line wit the company’s expectations.

‘We remain very focused on delivering in the areas we can control, with our investment and cost saving programmes on track, and we are actively mitigating the factors outside the company's control,’ ITV CEO Carolyn McCall said.

‘We have a solid balance sheet which enables us to make the right decisions to build a robust and growing business and deliver returns to shareholders in line with our guidance.’

ITV advertising revenue slides amid challenging environment

The first half of the year (H1) will be impacted by the continuing economic and political uncertainty and its effect on the demand for advertising, ITV said.

The absence of the Football World Cup, ITV’s planned essential investments, the pre-launch costs of BritBox and the timing of ITV Studios deliveries will all hurt the overall performance of the broadcaster in its first six months of trading.

As a result, ITV’s total advertising is forecast to fall 6% in H1.

However, over the full year ITV expects to deliver double digit growth in online revenue and good organic revenue growth in ITV Studios.

ITV results: key figures

The British broadcaster has seen continued good viewing performance onscreen and online, with ITV Family Share of viewing up 4% and online rising by 16%.

Total ITV Studios revenue climbed 1% to £385 million, up from £382 million, with organic revenues at constant currency up 1%. Meanwhile, ITV broadcast and online revenue was down 7% at £489m, with ITV total advertising down 7% as previously guided.

BritBox deal with BBC nears completion

ITV is scheduled to launch its new subscription video on-demand (SVOD) service in the H2 this year.

The new streaming service, which is a joint venture between ITV and BBC, is focused on delivering British TV series from the past and present supplied by both broadcasters.

ITV has also concluded an agreement with tech provider Amobee, which will enable it to deliver programmatic addressable advertising around our premium video inventory on the ITV Hub.

‘This means ITV can offer the best of both worlds at scale - mass simultaneous reach across linear channels where we delivered 100% of all commercial audiences over 5m, alongside targeted, data-driven addressable advertising in a brand safe environment on the ITV Hub,’ McCall said.

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