ITV issues profits warning due to Covid-19 | Major Businesses | Business
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A general softening in advertising and restrictions on working practices in filming due to the Coronavirus outbreak has led UK commercial broadcaster ITV to warn of a forthcoming significant drop in projected revenues.

ITV 7 april 2019Specifically, the lack of ability to film was having a negative impact on ITV Studios' ability to film productions. The company has been obliged to pause a significant number of productions in the UK and internationally. It tried to assure that the company was doing so in a systematic manner to ensure that it was well placed to resume production as soon as we are able to and to minimise the costs of disruption.

“We are operating in unprecedented and uncertain times, requiring us to take difficult decisions, plan carefully and act with speed,” said ITV chief executive Carolyn McCall. “We are actively taking measures to reduce costs and manage our cash flow so that we are best positioned to continue to deliver our strategy of building a digitally led media and entertainment company over the medium term.”

ITV said that the closure of shops, factories and entertainment facilities, have had an increasing impact on the company’s advertising revenues and therefore forecasts for March and April have deteriorated since it last updated the market on 16 March. ITV conceded that it had seen further deferrals in advertising which were now coming from across advertiser categories rather than previously just in travel. While noting that the company would next update its guidance at a trading update in May, it warned that over a full year each 1% decline in total advertising revenue would reduce revenue and profit by around £17 million before any mitigation.

The company tried to assure the investor community by announcing that management was very focused on cash and has implemented measures to reduce costs and to tightly manage cash flow. It has reviewed programming spend in light of the weaker advertising environment and expects to reduce its programme budget by at least £100 million.

It added that the company was also implementing contingency plans to enable it to continue to produce as many programmes as possible, particularly on news output and live productions. ITV also noted that it was too early to quantify the impact of such events on ITV Studios' revenue and profit.