ITV share price drops as group flags flat H1 revenue
Shares in TV (LON:ITV) have fallen into the red in London this morning, with the blue-chip broadcaster flagging flat half-year revenue amid uncertainty ahead of the EU referendum next month, which is weighing on ad sales. The company, however, noted that it was on track for profit growth in the first six months of the year.
As of 09:11, ITV’s share price had fallen 1.67 percent to 211.70p, underperforming the FTSE 100 index which is 0.59 percent worse off at 6,126.27 points. The group’s shares have lost nearly 18 percent of their value over the past year, and are down more than 22 percent in the year-to-date.
ITV announced in a statement this morning that its total external revenue had climbed 14 percent to £755 million in the first quarter of the year, with non advertising revenue up 34 percent to £428 million, boosted by strong performance of ITV Studios. Going forward, the blue-chip broadcaster expects its net advertising revenue to be broadly flat for the first half. It, however, flagged profit growth in the first six months of the year.
“This is against the backdrop of uncertainty in the UK advertising market, which we have experienced since the debate over Brexit began,” the company’s chief executive Adam Crozier said in the statement.
Reuters quoted analysts as commenting that ITV’s update had confirmed anecdotal reports that advertising had been below expectations in the second quarter, with late money not being spent due to uncertainty around the June 23 referendum. Numis lowered its outlook for the broadcaster’s advertising revenue growth for the year to one percent from four percent, and slashed its pretax profit expectation by three percent.
“We see scope for advertising to rebound when Brexit uncertainty is resolved and stress that with a far greater base of profitability and transformed balance sheet, ITV is much better placed to weather a downturn than in 2008,” Numis analysts said, as quoted by Reuters.
As of 09:35 BST, Thursday, 12 May, ITV plc share price is 210.75p.