ITV prof­its close to wipe­out as ad­ver­tis­ers turn off in lock­down

The Daily Telegraph - Business - - Business - By Si­mon Foy

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

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