ITV confirms forecast revenue losses

ITV is predicting higher net TV advertising revenue (NAR) losses in May and June due to a continuing “weak” market.”

The beleaguered broadcaster reported this morning (Thursday May 14) that NAR was down 16% in April, up from 15% in the first quarter, and it is forecast to be down 16% overall for April-June.

However, it underlined its performance would beat the market, which is forecast to be down 17% overall for the period.

It says performance has been boosted by high rating programmes that have beaten BBC1 in peak drama, entertainment and sport such as Britain’s Got Talent.”

Andy Viner, head of media, at business advisors BDO Stoy Hayward says: “There’s no doubt ITV is still struggling but today’s results show that there’s light at the end of the tunnel. Ad revenues are down 15 per cent but Michael Grade will have been encouraged that ITV is slightly outperforming the market, where ad revenues have dropped by 16 per cent.

“Allied to this is the fact that advertising revenues for the future are looking more positive. The market is expected to stabilise in the second half of 2009 and then receive a shot in the arm in Q2 2010 thanks to the World Cup.”

He added that TV’s cost-cutting news is also encouraging for the broadcaster’s bottom line as the company aims to cut costs by £155m this year and by a further £40m in 2010, building to total savings of £285m in 2011.

“What’s more, ITV looks to be getting its programmes and platforms right. Programmes like Britain’s Got Talent, which have made Susan Boyle a superstar, have helped ITV maintain audience share of 23.4 per cent, while the online division has performed particularly strongly, with video views increasing by 300 per cent to 25m views, although online revenues remained flat. A successful digital strategy is going to be crucial in securing a profitable business model, both in the short term and also as ITV looks to come out of the downturn all guns blazing.”

ITV released its interim statement this morning ahead of its AGM. It revealed last month it had begun searching for a new chief executive following Michael Grade’s decision to step down at the end of the year.†

ITV, which reported a 41% plummet in profits in its last full year results due to the recessionary advertising slump, has already announced measures to improve is finances, including selling its digital terrestrial multiplex business SDN.

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