Free-to-air broadcaster ITV (ITV) gained 5% to 75.8p after it updated on first quarter trading and revealed viewing figures were up even if advertising had fallen substantially.
The coronavirus pandemic both hurt demand for advertising in the first quarter of the year and continued into April with advertising down 42% for the month. Its ITV Studios production business is effectively on pause.
For the three months to 31 March, total external revenue was down 7% at £694m on-year, with ITV studios revenue down 11% at £342m, broadcast revenue up 2% at £500m and ITV total advertising up 2% as originally guided, with online revenues up 26%
ITV total viewing was up 2% with 'very strong' growth in online viewing up 75%, simulcast viewing up 112% and reach up 40% on the ITV Hub, the company said.
ITV main channel's share of viewing (SOV) was marginally up at 17.9%, its best quarter since 2009 and the company flagged growth for its BritBox venture with the BBC in the form of free trial starts and subscriptions.
COMFORT VIEWING BOOST
AJ Bell investment director Russ Mould said: ‘With classic shows popular as comfort viewing, it’s no surprise to see good demand for ITV’s library of existing content and more people signing up to its Britbox subscription service venture with the BBC.
‘As the economy moves out of hibernation, businesses will want to re-engage with consumers and the apparent resurgence of television in the crisis makes it an obvious way of doing so.
‘Creating new ads might be more complicated in a world of social distancing but ITV is preparing the ground by working with agencies and potential advertisers.’
Shore Capital analyst Roddy Davidson said: ‘Notwithstanding the damaging implications of the COVID-19 pandemic for economic growth, we expect that brands (not all of which have turned off the tap on advertising) will look to reenergise sales as a gradual easing of lockdown measures is introduced and to ensure maximum effectiveness from their marketing budgets.
‘We believe that this could be good news for TV (reflecting its ability to safely and effectively deliver a mass market consumer audience) and that actions taken to date should help ITV recover quickly when conditions improve.’
