Love Island delivers for ITV in tough ad market
Company reported total external revenue down 7% to £1.476bn in its first half
Maura Higgins, one of the stars of Love Island
Britain’s biggest free-to-air commercial broadcaster, ITV, said a strong contribution to online revenue from reality show Love Island helped limit the decline in total ad revenue to 5 per cent in the first half of the year. The decline was not as bad as feared and ITV shares gained more than 5 per cent in the first few minutes of trading in London on Wednesday.
The company reported total external revenue down 7 per cent to £1.476 billion and adjusted core earnings down 13 per cent to £327 million for the six months to end-June, with the latter just beating market expectations.
It said economic and political uncertainty continued to impact the demand for advertising as it expected, with total advertising forecast to be in a range of minus 1 per cent to plus 1 per cent in the third quarter.
“The economic and political environment remains uncertain but we are very focused on delivering our strategy and creating a stronger, more diversified and structurally sound business,” chief executive Carolyn McCall said on Wednesday.
Analysts at Citi said the results “should turn heads for the better”, pointing to a 2.3 per cent decline in second-quarter advertising revenue versus guidance of about minus 5 per cent, a beat of about 10 per cent on adjusted core earnings and additional cost savings flagged by the company.
ITV has built up its studios production business in recent years to reduce it reliance on advertising demand in Britain.
Total ITV Studios revenue fell 6 per cent in the period, which it put down to the timing of programme deliveries, but it said it expected a solid second half, with shows such as I’m a Celebrity... Get Me Out of Here! returning. Full-year revenue for the unit would grow by at least 5 per cent, it said.
ITV kept its half-year dividend unchanged at 2.6 pence a share.