ITV Suffers Biggest Advertising Drop Ever Due to Covid-19 Lockdown | Business

0
38


ITV was hit by the biggest advertising drop in its 65-year history, a 43% drop in the second quarter, as the impact of the coronavirus pandemic is expected to push the broadcaster off the FTSE 100 during the reshuffle next month.The broadcaster, which has abandoned the payment of an interim dividend to strengthen its balance sheet, reported a 50% drop in adjusted profits to £ 165million in the first half of the year. The company said advertising revenue fell 21% in the first six months, down from £ 178million to £ 671million, including a 43% drop in the second quarter.

Carolyn McCall, chief executive of ITV, said that if the worst came to pass, lingering uncertainty in the market meant the company would not release performance forecasts for the remainder of the year.

“It was one of the most difficult times in ITV history,” she said. “While our two main sources of revenue – production and advertising – declined considerably in the first half of the year and the outlook remains uncertain, we are now seeing an upward trajectory with the restart of productions and the return of advertisers. . ”

The broadcaster said advertising revenue improved significantly in July, down 23%, with analysts estimating August and September to drop below a 20% drop.

ITV Studios, which broadcasts from Coronation Street to Love Island, has now restarted 70% of the 230 suspended shows as the pandemic halted film and television production across the UK. ITV Studios announced a 17% drop in revenue to £ 630million in the first half.

The company’s stock price has fallen significantly during the crisis, down 60% so far this year to 59 pence, pushing its market value down to £ 2.3 billion. ITV shares were down 4% at the start of trading on Thursday.

Sign up for the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

“A 60% drop in the share price means speculation on offers is bound to resurface, if it ever subsides,” said Richard Hunter, Head of Markets at Interactive Investor. “In any event, at current levels ITV is destined to be relegated from the FTSE 100 in the reshuffle next month.”

McCall addressed the issue of speculation about the deals, arguing that the company was significantly undervalued.

“We’ve been speculated as an acquisition target for about 12 years, maybe 15, I don’t think there was a year or a month before that happened, so we don’t do comment on that, ”she told me. “We do well on our own and the share price does not reflect the performance of the company or even the value of the company. We have a very solid foundation… we have the capacity, I think, to grow the business and create value in the future.

LEAVE A REPLY

Please enter your comment!
Please enter your name here