ITV eyes best broadcast performance for five years - UPDATE

13th Nov 2014 07:06

ITV revenue growth accelerated in the third quarter as the broadcasting and television production group continued to generate net TV advertising revenues (NAR) well ahead of the market, although they were at the lower end of consensus analyst forecasts.Total external revenues rose 8% to £1.8bn in the nine months to 30 September, up from 7% growth in the first half of the year, thanks to pay and interactive revenue growth improving to 24% from 20% at the interim stage.ITV studios revenue growth also improved, rising 10% to £609m, driven by the acquisitions completed in previous periods.With two new channels added, in the shape of ITVBe and first pay channel ITV Encore, the broadcast division performed strongly with advertising revenues up 6% in the first nine months.Chief executive Adam Crozier said the broadcast arm lifted advertising revenues 6% in the first nine months and he expected the full year to see a rise of around 5%, "well ahead of the UK television advertising market and our best outperformance of the market for five years", but at the lower end of consensus forecasts.The 'ITV Family' of channels saw net TV advertising revenues (NAR) climb 4% in the third quarter and just 2% in October 2014, at the lower end of guidance. The company said November was up 1% and December will be 1%-3% to give 1%-2% for the fourth quarter.Commercial audience share fell 6%, although this was against a tough comparative performance in 2013 when ITV1 grew its audience for the first time in over 20 years, and ITV Family share of viewing for the 10 months to 31 October was down 5% to 21.8%, which Crozier admitted was "not as good as we would like"."We remain clearly focused on improving onscreen performance and we expect to outperform the advertising market again next year," Crozier added.2015 will see this year's investment in scripted content begin to deliver returns, with the return of 'Thunderbirds Are Go!', new UK drama including Eddie Izzard starring in a Charlie Higson-written 'Jekyll and Hyde', and US dramas including Ray Liotta and Bill Paxton in 'Texas Rising', as well as a US version of 'Saturday Night Takeaway' for NBC.Broker Liberum acknowledged that those of a bearish nature will focus on full year guidance of circa 5% TV ad growth implying just 2% in the fourth quarter and lying at the lower end of consensus expectations, together with Crozier's talk about the need to improve audience share.To balance this, analysts pointing out the more significant pluses of an expected outperformance of the market again in 2015 - "this has underpinning as two of the four main biennial deals come up for renewal in 2015 and should see a shift from Channel 4 to ITV1".Also, the acceleration in growth in online and interactive, with "much of this revenue will be very high margin and is coming from the launch of new channels and the Sky retrans renewal".Numis said it expected to maintain our full year pre-tax profit and earnings per share forecasts of £675m and 13.0p, just shy of the consensus of 13.3p."We remain supportive of ITV, which is executing well on its digital and Studios strategy combined with tight financialmanagement," analyst Paul Richard wrote in a note.