ITV on Wednesday said it expected its net advertising revenues to fall by 14 per cent for the three months to September, confirming the weak advertising market which accelerated Charles Allen’s departure as the broadcaster’s chief executive.
Mr Allen, presenting interim results a day after announcing he would step down by January, blamed “the acknowledged weakness in the advertising market over this summer” and the effect of the Contract Rights Renewal system agreed with ITV’s regulator at the company’s creation, which allows advertisers to pay less when its ratings fall.
The expected third quarter fall in advertising would lead to an 8 per cent drop in net advertising revenue for the nine months to September. ITV did not give a full-year forecast.
Mr Allen said the interim results showed that its strategy for developing other businesses beyond the core ITV1 channel was working. Revenues from outside ITV1 grew by 25 per cent to £423m, helping offset an 8 per cent decline in ITV1’s net advertising revenues to £654m.
A £17m exceptional gain on the sale of its Granada Learning business lifted pre-tax profits by 12 per cent, from £154m to £173m, as revenues advanced from £1.05bn to £1.08bn.
ITV’s revenues from its consumer division, which includes Friends Reunited, the group of websites it bought last December, and TV Play, a phone-in quiz show channel, rose by 300 per cent to £69m, nearly matching the £70m advertising revenues from its digital channels.
Mr Allen said it would launch a broadband service early next year, but added: “Our focus remains on revitalising the ITV1 schedule performance.” He highlighted “strong” autumn and winter schedules for the core channels.
In early trading in London ITV shares were 1p lower at 971/2 p