ITV’s advertising drama sparks investor exodus
A WARNING on the future of advertising from a major investment bank sent ITV’s shares into the red.
Adrien de Saint Hilaire at Bank of America Merrill Lynch said the fall in the number of viewers watching traditional TV channels, combined with the loss of advertising that this will bring, made broadcasters like ITV look vulnerable.
The likes of ITV are also having to spend increasing amounts of money to develop their online products – such as on- demand service ITV Hub – in the race to catch up with rivals including Netflix and Sky’s Now TV.
Saint Hilaire added that TV watching is declining by 8pc every year among the younger generation which was brought up surrounded by modern technology.
These individuals will, by 2020, represent around 50pc of the workforce and be the direct target audience of advertising.
ITV slumped 5.9pc, or 8.15p, to 129.1p as Bank of America recommended investors reduce their stakes in the company. Making up for some of ITV’s losses on the FTSE 100, technology company
Sage Group climbed 5.4pc, or 32p, to 625p.
It raked in £465m in revenue for the three months to December 31, a 7.6pc increase on the same time a year before.
Sage, which makes accounting software for businesses, has desperately been trying to improve its products and move from oneoff sales to subscriptions to pull more money through the door.
The shake-up saw chief executive Stephen Kelly abruptly depart last August. Steve Hare, Sage’s finance head, replaced him in November.
Shortly after he took up the role, Hare dropped the firm’s mediumterm revenue growth target of 10pc. In the last three months of 2018, only Sage’s North American division delivered revenue growth above 10pc. The UK and Ireland’s revenue growth was 5.9pc, which Sage said indicated ‘strong signs of recovery’.
The Footsie ended the day down 0.4pc, or 27.76 points, at 6,834.92 points. John Wood Group, which helps oil and gas businesses to build their rigs, weighed on the index as it slid 4.7pc, or 26.4p, to 541.2p following a downgrade from a broker. Shares in takeaway business
Just Eat rocketed as US investor The Capital Group Companies, one of the world’s oldest investment firms, ramped its stake up from 5.1pc to 10pc.
The deal occurred on Tuesday and, taking Just Eat’s closing share price that day, would have cost Capital Group around £209m. Shares in Just Eat climbed 5pc, or 31.4p, to 663p yesterday. Super Noodle and Paxo owner
Premier Foods also crept higher as investors chewed over its update for the 13 weeks ending December 29.
Sales of its Mr Kipling products were up 5pc, which helped investors stomach a 2.2pc decline in group sales as a warehousing and distribution reshuffle hit sales of unbranded sweet treats.
Change was afoot elsewhere at Premier as finance head Alastair Murray was appointed temporary replacement for outgoing boss Gavin Darby until a permanent successor is found.
Premier added it was still in talks with potential buyers for its Ambrosia custard and rice pudding brand. Shares climbed 2.8pc, or 1p, to 35p. Homeware manufacturer Portmeirion, owner of the Royal Worcester and Pimpernel brands, jumped 6pc, or 60p, to 1060p as it said 2018 revenue would be ahead of expectations, at a minimum of £89.2m. Sales in the UK, US and South Korea were credited with driving the strong performance, and the home fragrance business did particularly well.