ITV blamed uncertainty over a tough or smooth Brexit for a pointy drop in promoting revenues, which it warned might fall by as a lot as 7 per cent within the ultimate quarter of 2016.
The UK’s largest business broadcaster, which screens fashionable exhibits comparable to The X Issue and Coronation Road, registered a four per cent fall in promoting within the three months to the top of September, in contrast with the identical interval in 2015.
The disappointing finish to the yr — ITV forecasts a drop of three per cent for the entire of 2016 — will unsettle the tv business because it seems forward to an unsure 2017.
Analysts have predicted a fall of between 5 and 6 per cent in TV promoting within the remaining quarter of the yr. Sky just lately reported a three per cent fall in promoting revenues within the third quarter.
The Christmas interval is meant to provide the TV promoting market a lift as corporations resembling John Lewis and J Sainsbury spend tens of millions on advertising campaigns.
However even with the seasonal carry, the business is heading for its worst yr because the monetary disaster in 2009.
Regardless of the gloomy predictions, ITV nonetheless managed to report an general 5 per cent improve in revenues to £2.1bn for the three months to the top of September. This was partly pushed by an 18 per cent improve in revenues from its studio division, which rose to £923m, but in addition helped by the autumn within the worth of sterling.
ITV’s chief government Adam Crozier stated it was an indication of how resilient the corporate had turn out to be however admitted that income within the studio division have been more likely to be flat in 2017, sparking recent concern for buyers as they search for new sources of progress on the firm. Earnings per share are more likely to stay flat in 2016, ITV stated.
A lot of that may be attributed to the state of the advert market and whereas Mr Crozier stated there was a “stirring” amongst massive advertisers corresponding to supermarkets within the run-as much as Christmas, many corporations have been “holding again within the brief time period” as they thought-about the financial uncertainty brought on by the UK’s vote to go away the EU.
However he pointed to a barely extra optimistic image in 2017 based mostly partly on ITV’s new unique deal to display stay horseracing from the beginning of subsequent yr.
“We’ve executed nearly all our offers with the key shopping for businesses,” he stated. “Plus we’ve got a really robust slate of exhibits for subsequent yr — some nice dramas, new leisure exhibits like The Voice — and we even have the horseracing which can usher in real incremental income.”
Final month ITV introduced it was chopping greater than one hundred jobs as a part of a £25m restructuring programme for 2017.
Analysts at Citi stated that whereas the promoting outlook had “deteriorated”, ITV’s value-slicing programme and powerful onscreen efficiency meant the corporate was higher outfitted to cope with what might be a bumpy 2017 because the promoting market tightens.
“The purpose is that ITV’s earnings per share feels higher shielded than prior to now within the face of falling NAR (internet promoting revenues),” Citi analysts stated.
Analysts at Jefferies have been extra optimistic. “The September and October promoting weak spot was on the peak of uncertainty round Brexit. November and December are seeing a calmer response,” they stated.
Shares in ITV climbed 2 per cent to 170p in early buying and selling earlier than falling again to 166p later within the day.