Sign up UNITED KINGDOM
Proactive Investors - Run By Investors For Investors

ITV slumps as third quarter ad revenue remains under pressure amid Brexit uncertainty

ITV expects net advertising revenue to fall 5% for the year as Brexit uncertainty continues to hurt business confidence
ITV
ITV shares were on the back foot after its third quarter trading update

ITV PLC (LON:VOD) slumped as the broadcaster reported a decline in third quarter net advertising revenue that was worse than analysts had expected.

The company said its net advertising revenue for its family of channels dropped 4%, compared to an 8% drop in the first half. ITV had already guided towards a 4% fall for the quarter in July but analysts had expected a 3.5% dip.

READ: ITV upgraded to 'buy' from 'hold' by HSBC

Vodafone sees a return to ad revenue growth in the fourth quarter but a 5% decrease for the full year.

In the nine months to 30 September, total external revenue edged down 1% to £2.13bn from £2.15bn, as a 7% decline net ad revenue offset 8% growth in non-advertising revenue.

ITV’s online and pay business revenue slipped 4% while the ITV Studios division achieved a 9% increase in revenue.

"ITV's performance in the first nine months of 2017 is very much as we anticipated,” said chairman Peter Bazalgette.

“We've seen improving trends in all our key revenue lines in the quarter and we're on track to deliver on the commitments we set out at the start of the year.” 

Brexit weighs on business confidence

He said ITV is seeing a return to TV advertising from some fast-moving consumer goods companies and grocers but business confidence remains weighed down by worries about the implications of Brexit.

ITV Studios is expected to report "good organic revenue growth with profit broadly in line with last year” for the year while online and pay will “deliver good revenue growth”.

“We will enter 2018 in good shape with a strong operating performance underpinned by a robust balance sheet, and we look forward to the arrival of our new chief executive, Carolyn McCall, early in the New Year,” Bazalgette said.

Shares fell 2.60% to 150p in afternoon trading. 

Rivals Netflix and Amazon add pressure on ITV

“Despite the steady rise of the Studios business, ITV remains highly dependent on selling its advertising space," said George Salmon, equity analyst at Hargreaves Lansdown.

"Ad spending tends to rise and fall with the economic tide, and with concerns over Brexit and the UK economy high up on the agenda in many boardrooms, we’re in a bit of a lull at the moment."

He added: "In normal circumstances this wouldn’t be a great issue, however one has to wonder whether changes to how and when we watch content mean ITV will no longer be top dog when confidence comes back. "ITV’s own interactive services are growing, but bigger rivals like Netflix and Amazon are putting the pressure on in a big way.”

View full ITV profile View Profile

ITV plc Timeline

Related Articles

Laptop screen with graphs
August 03 2017
Total revenues for the six months to 30 June grew by 5%, with Ebiquity adding it remains confident in hitting its operating profits and earnings targets for the rest of the year
marketing
November 15 2017
Next Fifteen Communications expects another strong performance in the second half
picture of text
July 28 2017
Dotdigital has been named as one of the fastest growing companies in Europe

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2017

Proactive Investor UK Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use