Underlying revenue rose 6% to £2.5bn in the first nine months of the year, which was entirely driven by Studios. Studios revenue’s on track to beat 2019 levels in the current financial year.
Total advertising revenue in the Media & Entertainment division fell 2%, as expected. Digital advertising revenue rose 13%, but this still makes up a small proportion of the whole.
ITV’s mindful of current economic uncertainty and warned inflation would impact costs in the next financial year. The group said it’s on track for its medium-term targets, including delivering at least £750m of digital revenues in Media & Entertainment by 2026.
Sophie Lund-Yates, Equity Analyst at Hargreaves Lansdown:
“ITV has put in a resilient showing over the first nine months of the year. The shining light comes from the Studios business, where the group’s content-creation powerhouse is growing ahead of the wider sector. This industry is facing structural tailwinds, and these are unlikely to dissipate anytime soon. There are questions swirling about a potential breakup of ITV into its two separate parts, but doing this would leave the more troubling area of the business highly exposed.
The Media & Entertainment division is facing ongoing declines in advertising revenue. Traditional broadcast advertising spots are simply never going to regain their popularity. Primetime hits like I’m a Celebrity will boost things in the short-term, but these highly popular shows are too few and far between for this to be enough. That puts the onus on the group’s grand digital plans. Again, video on demand and streaming progress has been admirable and no one can dispute ITV’s willingness to grasp the nettle. The question is whether ITV’s digital schemes can build enough scale and popularity, fast enough. In today’s fiercely competitive landscape, there simply may not be enough spare eyeballs to go around.”
