Free-to-air broadcaster ITV (ITV) ticked up 0.8% to 125.3p, building on a strong recent run for the shares as its first quarter update was accompanied with a bullish outlook on advertising spend.
The company said it expected stronger growth in second half of the year after reporting a 2% uptick in first-quarter revenue amid an ongoing rebound in advertising market.
Total advertising revenue in the first half was forecast to be up around 26%, compared to the same period in 2020.
For the first quarter of the year, external revenue was up 2% at £709 million year-on-year.
ITV studios revenue was up 9% at £372 million, while media and entertainment revenue was down 3% to £484 million impacted by the national lockdown.
SURGE IN AD REVENUE
Advertising revenue was up 68% in April year-on-year, and the company expects further gains for the May and June.
‘We forecast May to be up around 85% and June up between 85% and 90% compared to the same period in 2020, benefiting from the Euros and Love Island,’ the company said.
‘We finished the quarter strongly with the substantial majority of our shows back in production and a recovery in the advertising market,’ it added.
Numis analyst Steve Liechti commented: ‘(The) shares are a liquid proxy for better near-term macro sentiment via mainstream/linear TV advertising, especially vs easy second quarter comps. However, we still see mid-term structural linear TV challenges that look tough to offset.’
