ITV share price rallies even as half-year revenues fall

Shares in ITV (LON:ITV) have jumped more than two percent in London in today’s session, even as the blue-chip company posted a drop in revenues for the first six months of the year. The FTSE 100 broadcaster, which faces a change at the top, however, reiterated its full-year outlook and lifted its interim payout to shareholders.

As of 08:36 BST, ITV’s share price had added 2.02 percent to 180.25p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.44 percent higher at 7,467.18 points. The group’s shares have lost more than two percent of their value over the past year, and are down by some 12 percent in the year-to-date.

ITV announced in a statement this morning that its total external revenue had dropped three percent to £1.46 billion in the first half of the year. Adjusted EBITA meanwhile fell eight percent to £403 million, while adjusted earnings per share dipped nine percent to 7.7p. The blue-chip broadcaster, however, lifted its interim dividend by five percent to 2.52p, reflecting the group’s “confidence in the underlying strength of the business,” and reiterated its full-year guidance.

“ITV’s performance in the first six months of the year is very much as we anticipated and our guidance for the full year remains unchanged,” ITV’s executive chairman Peter Bazalgette commented in the statement. He further said that the company was looking forward to the arrival of easyJet’s (LON:EZJ) chief executive Carolyn McCall who is scheduled to take the helm at the blue-chip broadcaster on January 8.

City A.M. quoted Panmure Gordon analyst Jonathan Helliwell as commenting that the guidance should “reassure investors that ITV is now moving past the worst point for cyclical headwinds and that structural pressures remain manageable”. Roddy Davidson at Shore Capital  meanwhile noted that the broker was “encouraged by this relatively robust performance against the very challenging advertising backdrop”.

“More broadly, we believe ITV’s valuation multiples already more than reflect weakness in advertising markets following a period of disappointing share price performance and, importantly, fail to reflect its medium-term attractions,” he pointed out, as quoted by the newswire. 

As of 08:55 BST, Wednesday, 26 July, ITV plc share price is 181.70p.