BREXIT looms, Easyjet is setting up a European HQ in Austria. But Carolyn McCall, at the helm of the airline for seven years, won’t be shuttling weekly between its Luton base and the Austrian capital. Instead, she is flying towards ITV where she will become the new CEO following the exit of Adam Crozier.
When she lands, what will be in her in tray? First up, the broadcaster’s share price. At 177p, it is down 14 per cent in the year-to-date as the slowdown in advertising spend at traditional media outlets bites. The resulting valuation has seen ITV mooted as a takeover target for those who may be looking to take advantage of sterling’s weakness. Liberty Global is tipped as an acquirer.
Analysts are confident that McCall can pilot ITV to a higher altitude with investors. Calling ITV his “top pick”, Liberum analyst Ian Whittaker cites her strong personal links, for example with government. From a media perspective, she was once CEO of Guardian Media Group. “We remain confident on the structural position of the free-to-air broadcasting space in general and ITV in particular, and that concerns have been overdone,” Whittaker concludes.
According to Roddy Davidson at Shore Capital, ITV’s medium term attractions include an unrivalled ability to deliver a mass market commercial audience to advertisers via “a trusted and well understood medium”; the scale and commercial value of its content portfolio; and the prospect of solid earnings growth.
The successor at Easyjet may face far stronger headwinds. McCall's departure, confirmed yesterday, comes as the business repositions itself in the face of Brexit. There remains anxiety, shared by Ryanair, over the ease of flying between the UK and EU come March 2019.
Despite expectations of a solid third quarter update from Easyjet on 20 July, Mark Irvine-Fortescue at Panmure Gordon sees the airline buffeted by “mediocre cost progress and nagging operational concerns”.
The analysts' views are born out by differing share price reactions on yesterday's appointment. Easyjet shares slid nearly one per cent on the open and ITV's rose two per cent, a signal that its investors see McCall as a steady hand on the controls.
It seems that Easyjet's loss is ITV's gain.