The UK’s leading commercial broadcaster has enjoyed a healthy third quarter of the year, driven by its studios division, but has warned that Brexit uncertainty will apply a brake on profits over the coming months.
For the quarter ended 30 September 2016, ITV reported that total external revenue had risen 5% year-on-year to £2.157 billion, with growth mainly from a 15% increase in non-net advertising revenue (NAR). In particular the key ITV Studios division, which has acted as a driver of growth for the recent past, continued to deliver, with acquisitions taking revenue up 18% on a yearly basis to £923 million. Revenues for the Online, Pay & Interactive division were up 22% with online viewing up 49% and long-form video requests up 22%. By contrast Broadcast & Online revenue inched up 1% to £1.537 billion while ITV Family NAR slipped 1%.Among the highlights at the Studios division was strong performance across key genres, with scripted programmes such as Victoria, Poldark and The Good Witch all sold to over 100 countries; around 60 formats sold internationally including The Voice, Hell’s Kitchen, Love Island and This Time Next Year. ITV also gained 162 new commissions and 139 recommissions across the business which it said will drive a return to good organic revenue growth in 2017.
Yet the company’s outlook for the rest of 2016 and beyond was rather pessimistic. Even though it was confident of outperforming the TV ad market, ITV Family NAR is forecast to be down around 7% in Q4 and down 3% over the full year. Due to the absence of a major sporting event next year, NPB was predicted to be around £25 million lower than in 2017.
Outlining what could be the challenges ahead, ITV plc to chief executive Adam Crozier said that in recent weeks the political and economic uncertainty has increased and that the company was currently seeing more cautious behaviour by advertisers. He added: Our strong on screen performance and continued ability to deliver mass audiences gives us the confidence that based upon the deals we have done we will also outperform our estimate of the TV ad market in 2017. We remain committed to our strategy of rebalancing and strengthening ITV and building a global content business of scale and we see clear opportunities to continue to invest for further growth across the business both organically and through acquisitions.”