ITV blamed continued economic and political uncertainty for a three per cent decline in net advertising revenue in 2016, as the UK’s biggest commercial broadcaster predicted an even bigger slump in the first four months of this year.
Announcing full year results for the year ended December 31, ITV reported that overall group revenues grew by three per cent to £3.064bn, while profit before tax was largely flat at £847m – a slight rise from £843m in 2016.
But it was ITV’s forecast for the first part of 2017 that will be watched most closely by analysts and investors. The company said it expected a six per cent decline between January and April this year – broadly in line with analysts and advertising market expectations.
ITV chief executive Adam Crozier said:
The continued growth in revenue and profit, despite a 3 per cent decline in spot advertising revenues resulting from wider political and economic uncertainty, is clear
evidence that our strategy is working and remains the right one for ITV.
Whilst our net advertising revenues have declined, we again outperformed the UK television ad market as a whole.
ITV’s production division, ITV Studios, grew its revenues by 13 per cent in 2016 to £1.4bn, nearly half of the group’s total revenues. Mr Crozier has been pursuing a long term plan to grow the production business to reduce the broadcaster’s reliance on advertising revenues.
The company also said it was on track to deliver £25m of “incremental costs savings in 2017” and added it would pay a final dividend of 4.8p, bringing the full year dividend to 7.2p, up 20% on 2015.