ITV lines up for World Cup win
WITH 44 days of Rugby World Cup having kicked off last night with hosts England taking on Fiji, the listed commercial broadcasters – which unusually for free-to-air services have exclusive rights to the tournament – will be hoping for a good showing from the home nations to boost their viewing and advertising figures.
In a note on the benefits of RWC 2015 to the terrestrial network – which includes bluechip ITV, Northern Irish firm UTV Media and STV – broker Peel Hunt pointed out that ITV’s share of viewing in the year to date has been declining but that this could be remedied in part with good audiences for the rugby.
In a note the broker said: ‘Live sport is increasingly “appointment viewing”, particularly when the top games are on at domestic peak time.
‘Rugby appeals to a key demographic. Hence we would expect all the big brewers, gaming companies and autos to be visible in coming weeks.
‘A healthy [advertising] spot market should also ensue if England, in particular, makes it to the latter stages.’
Peel Hunt also noted this will be the first Rugby World Cup where online TV players are now mass market, and a key part of the viewing experience.
The broker thinks RWC 2015 should help stimulate further registration sign-ups for the ITV network players, which in turn underpins important customer data collection – a key for advertising.
Peel Hunt has ‘buy’ recommendations on all three commercial ITV names, although it said it has the most conviction on STV, given the ‘operating momentum, cash generation and the “option value” inherent in many of its newer commercial initiatives’.
The broker pointed out that in the back- ground is also a likely ITV takeover of UTV, which would in effect be a ‘white knight’ deal rescuing the firm after calamitous downgrades from its new commercial channel, UTV Ireland.
But with all the nerves about the outcome of the rugby, it was a mixed day for the broadcasters, with ITV flat at 246.7p, UTV up 0.75p at 173p, and STV down 4.25p at 445p.
Nerves were on edge for the Footsie after the Federal Reserve decision to keep US interest rates on hold left global markets looking set for months more of uncertainty over when the first move will occur.
The FTSE 100 index closed 82.88 points lower at 6104.11, albeit off a hefty session low of 6053.87 attributed to a trader’s ‘fat finger’. The FTSE 250 ended down 92.72 points at 16950.73. European markets tracked similar big early falls on Wall Street, with Connor Campbell, financial analyst at Spreadex, saying the drop was because of the ‘fog of uncertainty’ that still lingered over the timing of a US rate hike.
Banks were among the biggest FTSE 100 fallers, hit as their profit margins would have been boosted by a higher interest rate environment. Barclays lost 7.2p at 253.25p, and taxpayer- owned Royal Bank of Scotland shed 7.1p at 318.9p.
Commodity stocks also suffered, with explorer Tullow Oil shedding 5pc to 200.4p as crude prices retreated again in the face of the continuing worries over global growth.
Most miners also suffered on a retreat by base metal prices, with Glencore also losing nearly 5pc, closing at 126p and BHP Billiton shedding 9.5p at 1098p.
But precious metal miners were the top blue- chip performers, with Randgold Resources gaining 134p to 3863p and Fresnillo adding 20p at 610p as the price of gold rose nearly 2pc, while the dollar eased in the wake of the Fed’s rate decision.
On the second line, shares in online property group Zoopla gained 2.1p at 210.4p as broker Deutsche Bank boosted its price tar- get to 240p from 188p, while retaining a ‘hold’ rating. But on the downside, exploration mid cap Premier Oil shed nearly 7pc, or 5.65p, to 78.3p after Canadian broker BMO Capital Markets downgraded its rating to ‘ underperform’ from ‘market perform’.
And iron ore firm Ferrexpo plunged 32pc, or 19p, to 40p after its transactional bank in Ukraine, Bank Finance and Credit, was declared insolvent. Ferrexpo said of its total current cash balance of approximately $280m, approximately $174m was held at Bank F&C.
Among the small caps, Newmark Security gained in early trading after its Grosvenor Technology subsidiary secured a ten-year workforce management deal, which it said would offer guaranteed revenue of $6m for the first five years, but shares eventually fell away to close 0.08p down at 3.32p.
And financing provider Private & Commercial Finance leapt almost 16pc, or 2.88p, to 21.38p after it said trading was ahead of expectations in its current financial year. ÷ AIM-listed wonder materials business Applied Graphene Materials jumped 13pc to 212.5p after it said that its overall trading performance for the full year was ahead of company expectations. The graphene producer said it had provided over 120 evaluation samples to customers in more than 20 countries. The Redcar-based firm also received its first patent approval from the Japanese Patent Office.