ITV posts solid first quarter but eyes major World Cup spike

14th May 2014 07:03

- Q1 net ad revenue up two per cent- Q2 net ad revenue expected to rise 12-13 per cent- Share of viewing down five per centUnspectacular advertising revenues at television network ITV in the first quarter will improve in the second thanks to a spike in World Cup-related ads, but viewing figures disappointed. Net advertising revenues (NAR) were up 2% in the first three months of the year and since then jumped 19% in April, towards the top end of expectations, with forecasts for 7% growth in May, between 12-15% in June and positive in July.NAR for the ITV 'Family' of free-to-air channels is forecast to be ahead of the market in the first half, up 7%.Chief Executive Adam Crozier said: "Looking ahead, our second-quarter advertising revenue is forecast to be up 12-13% and we expect to outperform the TV ad market in the first half and over the full year."On the downside, the ITV suffered a lower share of viewing in the period than had been expected, down 8%, with total ITV share down 5%. For one high-profile example, ITV's new format breakfast show, Good Morning Britain, saw its ratings halve from 800,000 to below 400,000.This did not dent the Crozier's confidence, and he said management had confidence in our strong schedule to come, especially the Football World Cup in June and the launch of two new channels this year.ITV Encore - the company's first pay channel - is on track to launch in June, followed later in the year by ITVBe, its first new Free To Air Channel in almost a decade.This comes as ITV invests in its Studios business, focusing more on programme making to reduce its dependence on advertising. Due to the phasing of programme delivery in 2014, with costs front-loaded, Studios first-quarter revenues were another disappointment, down 4%, although thanks to good forward visibility the company said it was still set to deliver good revenue growth over the full year.With Broadcast & Online revenues up 3% at £480m, driven by 2% growth in NAR as expected and 14% increase in Online, Pay & Interactive, total external revenues were up 2% to £585m. The FTSE 100 group is on track to deliver £10m cost savings over the full year.It added that it had in April improved its financial flexibility with a committed £525m new bank facility, replacing the previous £250m facility.Broker Investec said results were more or less as expected "but some bulls may have wanted more" and the shares were now looking fully valued versus media peers.Shares in ITV were down 4.9% to 181.6p at 09:22 on Wednesday. OH