Concerns about political impacts on ITV caused its shares to fall more than 8 per cent on Friday, in spite of the broadcaster reporting a strong performance in the year-to-date.
Advertising revenue in the first two quarters of 2010 rose by 8 per cent and an estimated 22 per cent respectively.
But Adam Crozier, ITV chief executive, said the group’s relatively strong second half of 2009 would provide tough comparable figures for the rest of 2010.
ITV also expressed fears that the austerity measures a new government seems likely to implement would depress the appetite of advertisers for extra marketing spending, and Mr Crozier told investors that ITV was committed to greater spending on shows to replicate the success of hits such as Joanna Lumley’s Nile.
Thomas Singlehurst, analyst at Citigroup, said: “These are all well-understood concerns, but the fact they are being articulated so distinctly won’t be helpful for sentiment.”
He added that the prospect of deregulation under a Conservative-led government, deemed to be beneficial to ITV under the chairmanship of former Tory deputy chairman and MP Archie Norman, had dimmed as a hung parliament hove into view.
“Even if the Tories end up in power, perhaps at the head of a minority government or Con-Lib coalition, we can be pretty sure the regulatory changes proffered by the Tories either won’t come at all or will be pushed down the agenda.”
Shares in ITV closed down 5¼p at 55¾p.
In a management statement preceding its annual general meeting on Friday, ITV said it would also see a bounce in advertising revenue growth in the coming quarter on the back of the World Cup, but cautioned that the outlook for the market was “highly uncertain” for the rest of the year. Revenues for the three months to March 31 rose 6 per cent to £450m.
Mr Crozier – who began at ITV in April – and Mr Norman told staff that the production of hit shows is crucial to the broadcaster’s future. Mr Crozier said there would be incremental investments in programming and online in the second half, although it would probably be limited to ITV2 and other areas.
ITV Studios, its production unit, saw revenues from external customers up 7 per cent to £60m in the first quarter, but internal productions, such as Coronation Street, fell £2m to £73m. Last month, Kevin Lygo, the director of programmes at Channel 4, was appointed as managing director of ITV Studios.
“The outlook for the latter part of 2010 and early 2011 is tough, with more testing year-on-year comparators and uncertain market conditions post-election,” Mr Crozier said.
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