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BREAKING NEWS

Love Island gives ITV a tonic in tough ad market

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LONDON (Reuters) – ITV <ITV.L>, Britain’s biggest free-to-air commercial broadcaster, said a strong contribution to online revenue from reality show “Love Island” helped limit the decline in total ad revenue to 5% in the first half of the year.

The decline was not as bad as feared and ITV shares gained more than 5% in the first few minutes of trading in London.

The company reported total external revenue down 7% to 1.476 billion pounds ($1.84 billion) and adjusted core earnings down 13% to 327 million pounds for the six months to end-June, with the latter just beating market expectations.

It said economic and political uncertainty continued to impact the demand for advertising as it expected, with total advertising forecast to be in a range of -1% to +1% in the third quarter.

“The economic and political environment remains uncertain but we are very focused on delivering our strategy and creating a stronger, more diversified and structurally sound business,” Chief Executive Carolyn McCall said on Wednesday.

Analysts at Citi said the results “should turn heads for the better”, pointing to a 2.3% decline in second-quarter advertising revenue versus guidance of about -5%, a beat of about 10% on adjusted core earnings and additional cost savings flagged by the company.

ITV has built up its studios production business in recent years to reduce it reliance on advertising demand in Britain.

Total ITV Studios revenue fell 6% in the period, which it put down to the timing of programme deliveries, but it said it expected a solid second half, with shows such as “I’m a Celebrity… Get Me Out of Here!” returning. Full-year revenue for the unit would grow by at least 5%, it said.

ITV kept its half-year dividend unchanged at 2.6 pence a share.

(Reporting by Paul Sandle; editing by James Davey/Keith Weir)

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