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Advertising revenue rebounds strongly for British broadcaster ITV

By Reuters

By Paul Sandle

LONDON (Reuters) – ITV said its advertising revenue was rebounding strongly from the impact of COVID-19, with April up 68%, May expected to be up about 85% and June between 85% and 90% higher, boosted by the Euros soccer tournament and the return of “Love Island”.

The British broadcaster said in a first-quarter update that it expected total ad revenue for the first half to rise around 26% on 2020, despite pandemic restrictions being in place for nearly all of the period.

Chief Executive Carolyn McCall said: “We have made a good start to 2021 with total revenue and total viewing both up, despite the continuing impact of the pandemic.

“We finished the quarter strongly with the substantial majority of our shows back in production and a recovery in the advertising market.”

ITV, which has a Studios production arm and a Media and Entertainment arm, said first-quarter total external revenue rose 2% to 709 million pounds ($985 million), driven by a 9% increase in Studios, which made the hit police drama “Line of Duty” for the BBC.

ITV’s total viewing was up 1%, helped by the popularity of entertainment show “Saturday Night Takeaway”, crime drama “Unforgotten” and Six Nations rugby.

Shares in ITV, which hit a nine-year low of 50 pence on March 23 2020, the day the first lockdown was announced, have risen 13% since the start of the year. They were trading up 0.6% at 125 pence at 0800 GMT.

Analysts at Barclays said ITV’s first-quarter revenues were 1% ahead of consensus, and the guide for second-quarter advertising of up 79-81% was ahead of current consensus.

ITV advertising momentum is clearly strong but this is arguably a COVID-19 induced short-term cyclical tailwind,” they said. “The key question is whether investors will favour this over structural concerns.”

($1 = 0.7198 pounds)

(Editing by Kate Holton and Alexander Smith)