ITV has pointed to a brighter end to a grim year for television advertising, with “encouraging signs” that the fourth quarter will be higher than last year in spite of the latest lockdown restrictions.
The UK’s biggest commercial free-to-air broadcaster on Thursday beat market expectations with total external revenue of £1.86bn, down 16 per cent in the year to date, but noted an upward trend in the crucial final months of the year.
With its hit show Love Island missing from the summer schedule, total advertising fell by 7 per cent in the three months to the end of September. But the group said spending in November was up around 6 per cent, giving it confidence it could end the fourth quarter “slightly up year on year”.
Fourth-quarter advertising is particularly important for ITV, accounting for 29 per cent of the broadcaster’s full-year ad revenue in 2019. ITV said its forecasts for the quarter assumed that “current Covid restrictions in England end as planned on 2 December”.
The first lockdown earlier this year hit ITV hard, inflicting the biggest fall in advertising in its broadcasting history. In response, the broadcaster scrapped its interim dividend in August and its guidance for the year.
On Thursday Carolyn McCall, ITV chief executive, said she saw “encouraging signs” for both the studio and broadcasting sides of the business, with about 85 per cent of productions completed or in progress.
“However, Covid restrictions and further national lockdowns have added production costs and are making it challenging to bring ITV Studios productions back to full capacity,” she said.
Other performance indicators were more mixed, with ITV missing some of its most popular shows over the summer. While total viewing hours rose by 2 per cent, ITV’s share of viewing fell by 4 per cent, a decline it partly attributed to “the volume of the BBC’s news output during the pandemic”. Online viewing fell 6 per cent.
Dame Carolyn said the Britbox was “on track” with “a successful launch” for Spitting Image, the first original commission of the ITV-led streaming service. ITV has yet to disclose any subscriber numbers within the UK.
Shares in ITV, which are down over 40 per cent this year, dropped about 1 per cent on Thursday.