ITV PLC (LSE:ITV) reported stronger profit growth than expected in the first half of the year, driven by strong online advertising for the Euros, Love Island and Mr Bates vs The Post Office.
Total revenue for the first six months of 2024 fell 3% to £1.9 billion, with total advertising revenue up 10%, ahead of guidance, but offset by the expected decline in revenue from the ITV Studios production department.
ITV Studios was held back by phasing of productions and Hollywood writers' and actors' strikes last year, with revenue down 13%, in line with forecasts, though underlying profits (adjusted EBITA) grew 5% thanks to more higher margin catalogue sales and cost savings.
The Media & Entertainment division grew adjusted EBITA by 230% as CEO Carolyn McCall said the digital advertising business “continues to go from strength-to-strength”, with a 17% increase in digital advertising revenue in the period, which contributed to the 10% increase in total advertising revenue.
This helped group adjusted EBITA rise 40% to £213 million, which seemed to be ahead of consensus forecasts of £195 million but the company has so many different measures of earnings it was not exactly clear.
Adjusted earnings per share were up 43% at 3.3p, which seemed to be well ahead of the 2.2p consensus forecast.
Statutory profit before tax was up sevenfold to £330 million and statutory EPS more than sixfold to 6.6p.
For the full year, McCall said she was confident of hitting targets, with ITV Studios expected to deliver record profits driven by an increase in higher margin catalogue sales.
But £80 million of ITV Studios revenue will be delayed from 2024 to 2025, blamed on the Hollywood strikes.
Total advertising revenue is expected to be broadly flat in the third quarter, with continued strong growth in digital advertising revenues, with the group “on track” to deliver at least £750 million of digital revenues in 2026.