ITV upbeat over festive ad spend despite budget cuts
‘There is clear evidence of the benefit of rebalancing the business and generating new revenue streams’
ITV said pressure in the advertising market will ease in the run up to Christmas, after its trading update showed buyers continuing to cut spending.
The broadcaster said it expected fourth-quarter advertising revenues to be up 1pc on last year, compared with a slump of 7pc across the first nine months of the year. In the third quarter advertising sales were down 4pc.
Overall revenues for the first nine months were down only 1pc to £2.1bn, as declines in advertising were almost matched by increased sales of programmes and a push online. ITV Studios, the production business, was up 9pc to £1bn. Sir Peter Bazalgette, ITV’s chairman, who has executive responsibilities until the arrival of Dame Carolyn McCall as chief executive in January, said the performance was “very much as anticipated”.
“This is clear evidence of the benefit of rebalancing the business and generating new revenue streams,” he added.
The television advertising market has been hit by budget cuts by supermarkets and big consumer brand owners such as Procter and Gamble and Reckitt Benckiser. Sir Peter said ITV was “seeing a return to TV advertising from some of the FMCGs and grocers although wider corporate confidence in the UK continues to be impacted by political and economic uncertainty”.
He gave no update on ITV’s confrontation with Virgin Media. The broadcaster has sent the cable operator a bill for up to £80m for retransmission fees for its main channel. If it refuses to pay, ITV has threatened to cut off 3.8m cable homes early next year.
ITV shares ended down 2.6pc at 150p.