ITV PLC (LON:ITV) said positive advertising revenue growth and strong online viewing figures for popular TV series such as Love Island and Queer Eye, allowed it to confirm its full-year financial guidance.
The FTSE 100-listed broadcaster expects ITV Studios production revenues to grow by 5% this year an at least that rate in the medium rate with a 14% to 16% margin, although the phasing of programme deliveries will hit next year’s performance.
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Love Island and the Rugby World Cup drove the performance of its streaming service ITV Hub, which has already reached the 2021 target of 30mln registered users, registering a 12% jump year-on-year.
The company has been focusing on another streaming service in partnership with the BBC, BritBox, which was recently launched in the fierce online space to compete with the likes of Netflix and Amazon Prime, although the £5.99 monthly subscription fee comes at half of the price of other platforms.
For the nine months of the year to 30 September, online viewing figures of full programmes were up 10% to 378mln hours, while the group's total viewing hours were down 6% to 12bn.
Better ad sales
However, better advertising sales in the past quarter, on top of the ITV Studios growth allowed full-year guidance for 2019 to be reconfirmed, along with indications that the dividend will be at least 8p per share.
Ad revenues were up 1% in the third quarter, at the top end of analyst expectations, and are expected to be 0-1% in the final quarter, with full-year guidance pointing to a 2% fall in revenues.
Total nine months revenues were down 1% to £2.5bn, with the weak first half for advertising revenue resulting in a 3% decline to £1.2bn.
Chief executive Carolyn McCall was pleased with viewing figures, highlighting that ITV made four of the five highest rating new dramas so far this year and that the Rugby World Cup saw a peak audience of 12.8m viewers during the final.
“We continue to build our creative pipeline and have a strong slate of new and returning programmes in the UK and internationally for both broadcasters and OTT platforms, including The Serpent, Zero Zero Zero, Suburra, Crank Yankers, Queer Eye, Saturday Night Takeaway, and Love Island globally.”
Markets.com's analyst Neil Wilson said there is "encouraging" second-half rebound following a tough 2019 during the shift to digital from traditional TV.
"As Disney+ launches today, and in the spring in the UK, it’s a timely reminder of the threat posed by cord-cutters to the ITV business model. Freshly-minted BritBox doesn’t look like it has the heft to compete in an increasingly crowded streaming space," he said in a note.
ITV shares were up 2% to 139.2p in early morning trading.