ITV, Britain’s largest commercial broadcaster, saw a drop in revenues in the first quarter as the fallout of the US writers’ and actors’ strike impacted advertising sales. The ITV share price saw a slight increase of 1.8% in Thursday’s trading, reaching 75.7p per share. Total turnover decreased by 7% to £887 million, with sales at ITV Studios falling by 16% to £382 million.
The strike in the States was not the only challenge for ITV’s production division, as programme delivery phasing and weaker demand from European broadcasters also affected trading. Despite these setbacks, ITV expects total divisional revenues to remain flat for the full year of 2024, with growth offsetting the impact of the US strikes. Some revenue, amounting to £80 million, is expected to be pushed into the next year due to the industrial action.
On a brighter note, revenues at ITV’s Media and Entertainment division increased by 2% to £505 million, with total advertising revenues improving by 3% compared to the same quarter in 2023. The UEFA European Championships in June are expected to further boost advertising revenues, with a projected increase of 12% in the current quarter. The ITVX streaming service performed well in the beginning of 2024, with total streaming hours rising by 16% to 449 million hours and digital revenues increasing by 11% year on year.
ITV’s Chief Executive Carolyn McCall expressed confidence in the company’s strategy, highlighting a strong pipeline of programmes and increasing demand for quality content. ITV Studios is on track to achieve organic revenue growth of 5% per annum from 2021 to 2026, with a margin of 13 to 15%. Similarly, the Media and Entertainment division aims to achieve at least £750 million in digital sales by 2026. Despite some uncertainty, analyst Adam Vettese from eToro noted that upcoming releases and events like the Euros in summer are expected to provide a boost to viewer numbers and advertising revenue.
Overall, ITV remains optimistic about its performance in the coming quarters, with a focus on developing content, product, distribution, and marketing for ITVX. The company is strategically positioned to diversify its customer base towards streaming platforms while continuing to deliver successful programmes. Although challenges persist, including the impact of industrial action and market conditions, ITV is committed to meeting its targets and achieving growth in key revenue-generating divisions. Investors are advised to keep an eye on the company’s pipeline of shows and upcoming events to gauge the performance in the remaining part of the year.
