ITV plc (LON:ITV) shares rose as it poached the chief executive of easyJet plc (LON:EZJ) to lead the UK broadcast company.
Carolyn McCall, who has been easyJet’s boss for the past seven years, replaces Adam Crozier as chief executive of ITV and will begin the role on 8 January 2018. The company announced in May that Crozier would be leaving at the end of June.
McCall is the former chief executive of Guardian Media Group so she has experience in heading a major media business and a FTSE 100 company, which gave her leg up over other candidates. Other contenders had included Direct Line boss Paul Geddes and the head of Scottish broadcaster STV, Rob Woodward.
READ: Macquarie downgrades stance on ITV, believes broadcaster will fall "victim to politics"
McCall’s departure from easyJet comes as the airline industry tackles the challenges surrounding the UK’s vote to leave the European Union, terror attacks in Europe and competitive price pressures.
easyJet is setting up a new Vienna-based airline to continue its operations after Brexit.
McCall takes on soft TV ad revenues at ITV
But McCall won’t have it much easier at ITV, which is contending with a weak advertising market as business confidence takes a hit from Brexit uncertainty.
In May, ITV said it expected an 8-9% fall in ad revenue in the first half. The broadcaster has responded to the difficulties in growing ad revenue by expanding its production division.
However, McCall will need to find a way to retain ITV’s dominant position in UK TV advertising and grow new digital ad revenues as the company faces heightened competition from technology giants, including Facebook and Google.
Shares in ITV increased 3.09% to 180.40p in morning trading.
Analysts postive on ITV's appointment of McCall
Liberum repeated a 'buy' rating and target price of 175p, saying the appointment of McCall is likely to be taken positively given her success at Easyjet..
"For ITV, we think the move suggests the company is comfortable with its strategic direction but her strong personal links should be helpful in several areas. ITV remains our top pick."
Shore Capital also retained its 'buy' rating and target price of 175p. The broker said it was reassured by the announcement since McCall has experience of running a major media business and leading the growth of an international FTSE 100 company.
"More broadly we remain out positive stance on ITV ahead of its interim results on 26 July particularly in view of the recent share price weakness...which, in our view, is being weighed down by short-term concerns over advertising spend and overlooks its medium term attractions.
"The latter includes: (a) an unrivalled ability to deliver a mass market commercial audience to advertisers via what is (in contrast to many digital platforms) a trusted and well understood medium; (b) the scale and commercial value of its content portfolio, and; (c) the prospect of solid earnings per share growth, a very attractive income progression (surplus cash flow three year aggregate dividend per share growth 39% excluding further “specials”), and strong cash generation (providing fuel for acquisitions, dividend growth / special payments, and de-leveraging an already under-geared balance sheet)."