Free-to-air broadcaster ITV (ITV) gains 0.9% to 137.1p as England’s run to the final of the Rugby World Cup and the continued success of Love Island helps underpin a solid third quarter set of numbers.

Total advertising revenue was up 1% in the third quarter, at the top end of guidance, with the company expecting fourth quarter revenue to be flat to up 1%. Non-advertising revenue was flat at £1.3bn.

Broadcast & online revenue slipped 3% to £1.5bn. The company said it was on track to deliver full-year guidance, including £20m of cost savings and double-digit online revenue growth.

For the nine months ended 30 September, total revenue fell 1% to £2.6bn and external revenue decreased 2% to £2.2bn on-year.

For 2019 as a whole, the production arm, ITV Studios, is expected to deliver at least 5% revenue growth at a 14% to 16% margin, with £130m more revenue for the full year secured at this point than last year.

However, the ‘phasing of deliveries’ is expected to adversely impact this part of the business in 2020.

The company’s BritBox joint venture with the BBC, a streaming service which provides access to both broadcasters’ archives, is said to have received ‘positive feedback’ since its launch on 7 November.


AJ Bell investment director Russ Mould is not convinced: ‘With Disney+ launching today in the US and next year in the UK, Apple TV+ recently emerging and plenty of other streaming services already available, this is a very crowded marketplace.

‘What is more its competitors have much deeper pockets to acquire original content. Would people, probably already reaching saturation point in terms of TV subscriptions, really pay another £5.99 a month to gain access to classic ITV and BBC shows?

‘This question feels particularly acute when you consider that a lot of both parties’ shows are already available on the existing BBC iPlayer and ITV Hub services.’

Looking at the statement as a whole Shore Capital analyst Roddy Davidson says: ‘We are reassured by the year-to-date trading performance and strategic progress highlighted in this morning’s announcement and specifically by management’s full year advertising expectations (against a tough backdrop).

‘We also remain positive on ITV’s underlying attractions including: its unrivalled ability to deliver a mass market audience and; the commercial and strategic value of its content portfolio/production capabilities.

‘That said, we retain concerns around the potential for on-going political and economic uncertainty to impact on advertising revenues and broader sentiment towards cyclically-sensitive stocks.’


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Issue Date: 12 Nov 2019