ITV slumped to its lowest price since January during trading yesterday after spooking investors with a gloomy outlook for the advertising market.
The drop was despite robust figures from ITV’s first-quarter, which saw group revenues rise 11 per cent to £500m. ITV television advertising jumped 12 per cent, beating the overall market increase of 10 per cent.
However, advertising could slump by up to a fifth in June on tough comparisons, due in part to last year’s football World Cup, and persistently tough market conditions, the firm warned. This could result in first-half ad revenues growing by just one per cent despite the bright first-quarter.
ITV shares hit a three year closing high of 93p in March after it announced its full-year 2010 profits trebled to £321m, with ad revenue surging back 16 per cent to £1.5bn. Yesterday shares closed 5.3 per cent lower at 71.9p.
Chief executive Adam Crozier once again stressed his plan to reduce ITV’s reliance on volatile TV advertising.