ITV celebrates strong growth in first half despite profit drop

(Alliance News) - ITV PLC on Thursday reported "good strategic progress and strong execution" in ...

Alliance News 27 July, 2023 | 9:40AM
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(Alliance News) - ITV PLC on Thursday reported "good strategic progress and strong execution" in the first half year, with increased ITV Studios revenue offsetting a weak advertising market.

The London-based television broadcaster and content producer said statutory pretax profit for the first half of 2023 decreased 79% to GBP45 million from GBP219 million in the same period last year.

Group adjusted earnings before interest, tax, depreciation and amortisation decreased 52% to GBP152 million with a 9% margin from GBP318 million with a 19% margin. Statutory earnings per share fell by 79% to 1.0 pence from 4.8 pence.

ITV nonetheless declared a 1.7p per share interim dividend, unchanged from the prior year, and said it is committed to paying at least 5p per share in total dividends for 2023.

Shares in the broadcaster were up 5.0% at 73.04p in London on Thursday morning.

ITV said total group revenue was down 1.5% to GBP1.96 billion from GBP1.99 billion. Advertising revenue fell by 11% to GBP811 million from GBP910 million as expected, although digital advertising revenue increased 24% to GBP179 million from GBP144 million.

The weaker advertising revenue however was "largely offset" by ITV Studios, where revenue reached GBP1 billion for the first time, increasing 7.3% from GBP927 million. Media & Entertainment revenue decreased 9.9% to GBP964 million from GBP1.07 billion, but digital revenue increased 24% to GBP218 million from GBP176 million.

Chief Executive Caroline McCall said the increased Studios revenue was due to "strong and growing global demand for ITV's content and that streaming platform ITVX "drove [the] increase in digital revenue...ahead of plan, supported by a step change in our viewer metrics - with more viewers watching more content and staying longer."

The broadcaster expects ITV Studios to deliver mid-single digit revenue growth for 2023, and at least 5% average organic growth annually to 2026. Also over the next three years, it expects to maintain an Eitda margin between 13 and 15%. In Media & Entertainment, ITV is "confident" it will deliver at least GBP750 million in digital revenue by 2026, in large part thanks to the success of ITVX.

"Looking forward we see a more encouraging outlook as advertisers build their campaigns around the large streaming and linear audiences expected to be drawn to the Women's World Cup, the Rugby World Cup and the eagerly anticipated return of Big Brother," McCall commented.

"As we said at the full year results in March, 2023 is the year of peak net investment in our streaming business and we expect profit to grow from here."

By Emma Curzon, Alliance News reporter

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
ITV PLC 59.84 GBX -2.73 -

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