ITV PLC (LSE:ITV) is confident that 2024 is going to be a better year for advertising and its also certain that it is positioned to capture more market share as the industry backdrop improves.
That, at least, is the view of analysts at Citibank. It comes after the American investment bank hosted chief executive Carolyn McCall and chief financial officer Chris Kennedy at a conference.
Citi, in commentary carried in a broader market note, also highlighted among ‘key takeaways for investors’ that ITV can leverage further cost efficiencies to improve margin. Additionally, it noted ITV is taking a focused approach to investing in AI tools, and management is confident in the medium-term prospects for ITV Studios.
ITV last week reported growth in its production segment and streaming service, which was largely offset by a downturn in television advertising spend last year.
Group revenue fell 2% to £4.26 billion during the year to December, however, ITV Studios revenue grew 4% to a record £2.17 billion, while digital revenue climbed 19% to £490 million after a strong first full year of streaming platform ITVX.
This “substantially offset” a 15% decline in linear advertising, according to chief executive Carolyn McCall, after the television sector suffered from a slowdown in advertising spending.
“2023 was the year of peak investment for streaming, which, together with the successful execution of our strategy and the efficiencies delivered to date, have made ITV more robust,” McCall commented.
“ITV has a leading, scaled, global studios business, a high growth streaming service and a cash generative linear advertising business [...] This ensures that we are well placed to grow profits from here.”
Adjusted pre-tax earnings slipped 32% to £489 million over the year, while net debt reduced 11% to £553 million.
A final 3.3p dividend was declared, taking the total to 5p for the year, while ITV also announced a £235 million share buyback, using funds from its Britbox sale, would start on Thursday.
“We remain on track to deliver at least £750 million of digital revenues by 2026,” ITV added.