ITV warns Olympic effect will not be good for ad revenues

By SCOTT REID
Published on 27/07/2012 00:00

Blanket coverage of the Olympics by the BBC will dent advertising revenues at ITV, the London-listed broadcaster warned yesterday.

Popular shows such as Britain’s Got Talent and the Euro 2012 football tournament helped ITV’s ad revenues rise 3 per cent in the first six months of the year, resulting in a 15 per cent rise in underlying pre-tax profits to £235 million.

But the group cautioned investors that revenues would be down by about 10 per cent in July, 11 per cent in August and between flat and minus 5 per cent in September. The outcome will be a broadly-flat performance for the nine months to 30 September.

It is likely that advertisers are reining in spending, partly because viewers are expected to tune into the Olympics games coverage on the BBC, although the broader slowdown in the economy is also to blame.
The rise in interim profits – ahead of City hopes – also reflects the continued recovery in fortunes at ITV’s studios division, which has made Inspector Morse spin-off series Lewis.

Analysts believe that a strong autumn and winter line-up of programmes will help push advertising revenues higher in the closing months of the year.

The schedule includes The Bletchley Circle, a thriller based on the lives of four women working at code-breaking centre Bletchley Park during the Second World War, and Mrs Biggs, a drama from the writer of Appropriate Adult.

It is estimated that every 1 per cent movement in advertising revenues over the course of the year alters ITV’s underlying
profits by some £12m.

ITV’s Scots-born chief executive, Adam Crozier, said: “Our investment in the creative pipeline is now clearly coming through in the financial results.”