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Advertising sales still weigh on ITV as it reports fall in first quarter revenue

10th May 2017 Print

As ITV reports its Q1 results Ian Forrest, investment research analyst at The Share Centre, explains what it means for investors.

“ITV reported a 1% fall in first quarter revenue today to £850m citing a continued impact from the fall in advertising sales. Indeed, despite good growth in online advertising, overall revenues are expected to drop 8-9% in the first half. Nevertheless, viewing figures remain strong and the studios business saw a healthy 7% increase in revenues with 75% of full year sales already secured. Interested investors should appreciate that ITV said it had left its full year guidance unchanged despite the mixed messages this morning.

“While the fall in advertising revenues was not unexpected the market was clearly hoping for better news. In addition, the recent news that CEO Adam Crozier is stepping down in June continues to overshadow the company. There was no news today of a replacement but the change may increase the chances of a takeover bid for the group with Liberty Global long rumoured to be interested.

“We continue to recommend ITV as a ‘buy’ for medium risk investors with a balanced portfolio due to the strength of the studios business and the attraction of the 4.6% dividend yield.”