Unhealthy comparisons: ITV warns of earnings dip

Published on Wednesday 11 May 2011 16:13

REVENUES at ITV will ease this month and next as the UK's largest commercial broadcaster runs up against tough comparisons with the advertising frenzy driven by last year's airing of the Fifa World Cup.

Signalling the end of 18 months of growth since the recession, ITV said advertising revenues were likely to fall by 9 per cent in May and as much as 20 per cent in June.

The company saw its shares down by as much as 6 per cent yesterday as a result. A decline in advertising had been anticipated, but investors were rattled after the X Factor broadcaster reported a weaker-than-expected performance for last month.

Revenues during April were 6 per cent higher than in the same period last year, versus previous expectations of an increase of between 8 and 12 per cent.

Chief executive Adam Crozier said: "As we anticipated, tough ITV1 World Cup comparators in June mean we may slightly under-perform the market in the first half. While we expect to outperform the market across the whole of the year, we remain cautious about the economic outlook."

The weakening performance follows a strong first quarter for ITV, which last month settled a long-running legal dispute with Glasgow-based STV.

ITV's advertising sales were up 12 per cent in the first three months of the year, pushing group revenues 11 per cent higher to 500 million.

Turnover at ITV Studios, the production division that makes programmes such as Coronation Street, rose 7 per cent during the first quarter to 64m.

The company said the improvement was driven by higher international sales.

Putting these contrasting quarterly performances together, ITV said advertising revenue for the whole of the first half would likely grow by between 1 and 2 per cent - about half of previous estimates.

A return to advertising growth is not expected before September.