ITV share price underperforms as broadcaster flags flat Q1 revenue

Shares in ITV Plc (LON:ITV) have lost ground in London this morning, underperforming the broader market, even as the blue-chip broadcaster unveiled a surge in full-year profits and announced plans to distribute special dividend to shareholders. The company, however, warned that its revenue was likely to stay flat in the first quarter of the current year, pressured by the timing of major sporting events.

As of 09:35 GMT, ITV’s share price had lost 0.32 percent to 248.80p, having shed more than one percent earlier in the session. The shares are underperforming the blue-chip FTSE 100 index which currently stands 0.37 percent higher at 6,175.43 points.
ITV announced in a statement this morning that its external revenue had increased by 15 percent to £2.97 billion last year. Broadcast and online revenues grew six percent to £2.15 billion, while ITV Studios delivered revenues of £1.24 billion, marking an increase of 33 percent year-on-year. ITV’s adjusted earnings per share for the year came in 20 percent higher at 16.5p, beating analyst expectations.

The FTSE 100 broadcaster said that it would pay a final dividend of 4.1p, taking its total payout to shareholders for the year to 6p, or 28 percent higher as compared with the 2014 payout. The company further recommended a special dividend of 10p, worth just over £400 million.
Going forward, ITV however warned that its net advertising revenue would be flat in the first quarter, marginally behind the market, before picking up again for the European Football Championship in the second quarter. For the full year, the company expects to outperform its estimate of the TV ad market.
The Financial Times quoted Steve Liechti, media analyst at Investec, as commenting that ITV’s forecast for flat advertising revenue in the first quarter was worse than the market had expected. While the special dividend is positive, he pointed out that it had been “widely anticipated”.
As of 10:01 GMT, Wednesday, 02 March, ITV plc share price is 248.60p.