ITV shares soar as advertising bounces back

A RECENT recovery in the TV advertising market cheered ITV investors yesterday, sending shares in the broadcaster up nine per cent.

The company said a recent decline in ad revenue had been halted in September. Although ad sales had fallen six per cent year-on-year in the third quarter, there was only a one per cent fall in September, suggesting a recent recovery.

The vast majority of the sales drop was felt in July and August, when the Olympics and Paralympics on the BBC and Channel 4 dominated viewing figures.

Overall, the company’s revenues rose four per cent in the first nine months of the year to £1.57bn, thanks to a strong showing from the firm’s production arm, ITV Studios.

Revenue rose 20 per cent at the division, which has had a particularly good year due to the success of hit show Downton Abbey. ITV Studios now accounts for more than a quarter of revenue, with the bulk still coming from the broadcasting and online division, where revenues were relatively flat.

“This has been an extraordinary year for UK television with many unique events including the Queen’s Jubilee, the London Olympics and the Paralympics,” chief executive Adam Crozier said yesterday. “In fact nine out of the top ten programmes aired will not return next year and as we expected this has affected our viewing performance.”

The company also said a cost-saving drive was ahead of schedule. ITV said it expects to save around £30m this year – £10m more than expected.

“With [advertising] agencies having seen a slowdown in September, we were prepared for the worst. In the event both the operational trends and the outlook are better than expectations,” Citi’s Thomas Singlehurst said.