A strong showing from ITV PLC’s (LON:ITV) online and content divisions helped to drive revenue growth at the UK’s biggest free-to-air broadcaster during the first quarter.
ITV – which is behind shows such as Coronation Street and Britain’s Got Talent – reported a 5% increase in total external revenue to £772mln (Q1 17: £734mln).
READ: ITV shares drop as Barclays downgrades the stock after disappointing 2017 results
Shares in the broadcaster rose 4% in early deals on Thursday to 157.1p.
TV ad market weak
Online was the star performer, with revenues soaring 41% compared to the same period a year ago, the company said in a trading update.
Although ITV Player – ITV’s online TV service – is free to watch, users can pay a £3.99 monthly fee for additional features such as skipping ads.
Companies have been cutting back on their advertising budgets over the past year or so due to the economic uncertainties and stalling UK economy, and revenue from TV ads was once again weak.
There’s also the issue that people are watching ‘live’ TV less frequently, with many preferring to watch shows and movies online at a time that suits them.
Net advertising revenue from TV inched up by 1% year-on-year and is expected to be broadly flat over the first half of the year.
Strong growth in online ads and sponsorship should offset that though, with ITV guiding for first-half total advertising revenue to be up 2%.
Towards the end of the second quarter, ITV will broadcast games from the FIFA World Cup, an event which generally boosts ad revenues.
Boss hails online performance
“While the economic environment remains uncertain online advertising continues to grow strongly,” said chief executive Carolyn McCall, who is currently in the middle of carrying out a strategic review.
“We expect ITV total advertising to be up 2% over the first half, but profits will reflect the timing of the Football World Cup."
The former easyJet PLC (LON:EZJ) boss added: “Over the full year we are on track to deliver double digit growth in online revenue and good organic revenue growth in ITV Studios.”