ITV profits fall as advertising revenue slips

ITV

The UK’s biggest commercial broadcaster said it continued to rebalance and strengthen the business and blamed “wider political and economic uncertainty” for advertising falls, the BBC reports.

It hailed a 13 per cent increase in revenue from the ITV Studios division.

Underlying pre-tax profit was up slightly on the year, from £843m to £847m.

Total viewing across its channels rose by 1 per cent last year, with the share for the main ITV channel increasing from 15 per cent to 15.4 per cent.

The company said in its results statement that it was proposing a special dividend of 5p a share, causing its share price to open 1.5 per cent higher.

Chief executive Adam Crozier said ITV had “delivered a good performance in 2016”, pointing out that total external revenues were up 3 per cent.

“The continued growth in revenue and adjusted profit, despite a 3 per cent decline in spot advertising revenues resulting from wider political and economic uncertainty, is clear evidence that our strategy is working and remains the right one for ITV,” he said.

Takeover speculation

Mr Crozier added that ITV – home to shows including Coronation Street, the X Factor and Broadchurch – maintained its “leading position” in the UK television advertising market.

“Whilst our net advertising revenues have declined, we again outperformed the UK television ad market as a whole,” he said.

Shares, which have fallen by a fifth in the past 12 months, rose 1.6 per cent to 205.8p in morning trading.

There has been speculation that ITV could be a takeover target by a foreign broadcaster.

“We continue to see ITV move away from a reliance on NAR [net advertising revenue],” said senior market analyst Neil Wilson at ETX Capital, “which makes it much more resilient.

“Non-NAR revenues now make up 53 per cent of total revenues – a big change over the last few years.”

He added: “The UK economy’s resilience has helped ITV’s share price, but there are signs of cracks in the UK economy that are a concern for the broadcaster.

“This makes any meaningful upside dependent on a takeover, as organic growth looks trickier, some very smart production acquisitions notwithstanding.”

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