- Total revenue up 1% to £2.97 billion
- ITV biggest faller in the FTSE 250 index
- ITV Studios revenue was up 9%
Shares in ITV (ITV) fell over 6% to 61p in morning trading as the free-to-air broadcaster reported ‘flat’ revenue for the nine months to 30 September 2023.
Total revenue crept up 1% to £2.97 billion compared to £2.95 billion a year ago, something that chief executive Carolyn McCall brushed over with comments that ITV is ‘on track to deliver £15 million of cost savings in 2023.’
A MIXED BAG
The performance of ITV’s various divisions was mixed. ITV Studios reported a 9% increase in revenue at £1.52 billion and ‘grew faster than the market driven by its position on a scaled and diversified global production business.’
ITVX also continued to perform strongly with digital revenues rising 23% and total streaming hours up 27% to the end of September ‘with monthly active users continuing to grow in line with expectations.’
This comes as no surprise due to the popular TV programmes part of the ITV schedule including Love Island, Women’s Football World Cup, and the Rugby World Cup.
In contrast the company’s Media & Entertainment (M&E) revenue was down 7% but ‘as expected’ at £1.45 billion driven by a fall of total advertising revenue down 7%.
Challenging advertising market fails to slow ITV's first half results
Total M&E non-advertising revenue was down 3% but with ‘good growth in subscription revenue’
UPBEAT ABOUT THE FUTURE
Despite commenting on a challenging macroeconomic environment this year, ITV’s CEO McCall reassured investors that the free-to-air broadcaster will ‘deliver its 2026 targets’ with two thirds of its future revenue coming from ITV Studios and its M&E digital business.
This optimism was shared by analyst Roddy Davidson at Shore Capital who said in a research note that the recent Media Bill mentioned in the King’s Speech will ‘provide support for UK broadcasters like ITV and STV+ (STV) by introducing tougher regulation for streaming services and ensuring that video-on-demand (VOD) players such as ITVX and the STV Player are easily discoverable on connected TVs, streaming sticks and set top boxes.’
However, it is difficult to ignore ITV’s share price weakness – down 13% over three months – and the possible impact of the Hollywood writers’ strike on ITV’s revenues for 2024 and 2025, adds Shore Capital’s Davidson.
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