ITV profits close to wipeout as advertisers turn off in lockdown
ITV’S profits were almost wiped out in the first half of the year after it suffered the most severe decline in advertising revenue in the firm’s 65-year history.
The broadcaster posted a pre-tax profit of just £15m for the six months to the end of June, down 93pc from £222m for the same period last year.
Total advertising sales tumbled by a record 43pc in the second quarter, and were down more than a fifth for the half-year period at £671m.
Britain’s biggest free-to-air commercial broadcaster also scrapped its interim dividend because of uncertainty over future growth.
However, the company has now restarted production on around 70pc of its TV shows and intends to plough around £960m into programming this year.
Carolyn McCall, chief executive, said: “This has been one of the most challenging times in the history of ITV.
“While our two main sources of revenue – production and advertising – were down significantly in the first half of the year and the outlook remains uncertain, today we are seeing an upward trajectory, with productions restarting and advertisers returning.”
The crisis forced ITV to cancel popular shows such as the summer and winter seasons of Love Island, while it also postponed production of key programmes including Coronation Street and Emmerdale. Even before the pandemic, ITV had struggled to retain investor confidence as it battled audiences moving from traditional television to online services such as Netflix.
However, viewer numbers remained robust during lockdown as the country was stuck at home. Consumers spent 8.5bn hours viewing the channel’s programmes, up 4pc on a year earlier.
BritBox, ITV’s digital video subscription service with the BBC, is ahead of target for UK subscribers, the firm added, with the service due to roll out in Australia later this year.
ITV said that Brexit and a potential government crackdown on junk food ads both posed a further risk to success. But analysts at Citi said the company had turned a corner and its results were strong.
Emilie Stevens of Hargreaves Lansdown added: “If the economic and advertising recovery turns out to be short lived, the Studios business which now accounts for a significant chunk of the group’s income should keep money coming in. ITV’s smaller diversifying ventures like BritBox and digital advertising platform Planet V are proving popular propositions but are too small to make their mark yet.”
Shares slumped 4pc to 63.3p, valuing the company at £2.55bn.
The stock was trading above 130p before the crisis hit in February.
Carolyn McCall, boss of ITV