(Bloomberg) -- ITV Plc's advertising sales fell less than forecast in the first half of the year as it benefited from strong viewing of its “Love Island” show and growth in online revenue.
- Britain's biggest free-to-air commercial broadcaster said total advertising sales fell 5% to 849 million pounds ($1 billion) in a statement Wednesday, calling the results “modestly better than expected.” In May, ITV had forecast a 6% drop for the first half.
Key Insights
- Chief Executive Officer Carolyn McCall has been trying to reduce ITV's reliance on ad sales, which make up half of revenue. ITV has been hit by a drop in ad spending by U.K. companies focused on preparing for Brexit, and the longer-term shift online.
- ITV said that it was targeting further cost cuts, increasing its total savings to between 55 million pounds and 60 million pounds between 2019 and 2022, up from 35 million pounds to 40 million pounds.
- “We're trying to offset the considerable investment we're making in the business,” McCall said in an interview on Bloomberg TV.
- As part of the push to diversify revenue, ITV and British Broadcasting Corp. announced last week that they're moving ahead with a U.K. streaming service, BritBox, later this year, with ITV owning 90% of the venture.
Market Reaction
- ITV shares rose as much as 6% in early trading in London, the most since January. They had declined 15% year to date through Tuesday, compared with a 15% gain for the FTSE All-Share Media Index.
- See the view from Citi analysts here.
Get More
- For the numbers, look here
- ITV said it expects total advertising for the third quarter to fall or rise by 1%, due to the ongoing political and economic uncertainty.
- “Love Island,” the unscripted show that sees young people pair up under the sun, will move to two series a year from 2020, ITV also said.
--With assistance from Joe Mayes.
To contact the reporter on this story: Greg Ritchie in London at gritchie10@bloomberg.net
To contact the editor responsible for this story: Rebecca Penty at rpenty@bloomberg.net
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