ITV shares were on course for their biggest one-day rally since 2009 on Wednesday after the broadcaster said it expected the highest annual advertising revenue in its history, raising hopes of a protracted period of underperformance can be.
The FTSE 100 media group predicted that the reopening of the economy would help it deliver a 24-year full-year year-on-year increase in advertising sales, which would increase shares by 11.5 percent in the year. morning trade.
The UK’s largest commercial free-to-air broadcaster reported total revenue of £ 2.79 billion for the first nine months of 2021, 28 per cent higher than a year ago and 8 per cent higher than the pre-pandemic period in 2019.
ITV was hit hard by a crash in commercials at the start of the coronavirus crisis, which prompted it to scrap its dividend and accelerate cost cuts.
Even before the pandemic, however, ITV shares came under pressure as the company struggled to retain viewers in the face of competition from deep-pocket streaming services such as Netflix.
Challenges remain for the company, whose shares are 28 percent lower than five years ago despite gains of 38 percent over the past year. “It’s hard to imagine that the consumption of broadcast TV will not continue to decline,” says Sarah Simon, an analyst at Berenberg.
But Wednesday’s trade update shows the company is making progress with its strategy under Dame Carolyn McCall, who joined easyJet about four years ago.
McCall led a push for digital services and expanded the company’s production arm ITV Studios, making programs for other broadcasters, including Line of Duty and Vigilance for the BBC.
ITV Studios’ revenue rose 32 per cent to £ 1.19bn during the period and the group said it had a “strong pipeline” of productions for clients in overseas markets, including the US and Italy, as well as inland.
Monthly active viewers of ITV Hub, the broadcaster’s online viewing platform, rose 22 percent year-over-year to 9.6 million. The company said consumers were encouraged by a redesign. Revenue from video-on-demand advertising increased by 54 percent.
ITV said it had entered into an “extended and improved” five-year deal with Virgin Media 02. Under the arrangement, ITV Hub will be integrated into Virgin TV cover boxes.
“By any standards, ITV had an outstanding nine months,” McCall said.
ITV, which has said it expects to set a final dividend, plans to spend £ 1.16 billion on programming next year, largely in line with previous years, with a list that includes the Fifa World Cup.
The total viewer of ITV channels dropped by 5 percent in the nine-month period compared to a year earlier, which according to ITV was against a difficult comparison in 2020 when viewership was higher due to coronavirus restrictions.
However, viewership for the flagship channel, ITV, rose from 16.6 percent to 17 percent, aided by Euro 2020 in the summer and reality show Love island.