Ad Slump Impacts ITV Bottom Line

LONDON: ITV’s first-half results show a loss before tax of £105 million, on revenues that fell to £909 million as a result of the ad downturn.

ITV said it outperformed the market, with its net ad revenues down 15 percent, as compared with a 17-percent decline for the British market as a whole. The broadcaster also reported that the rate of market decline has eased slightly. For the upcoming third quarter, ITV is forecasting a 12-percent decline in net ad revenues. ITV cited the efforts being made to mitigate the slump, including £57 million in cost savings already delivered, on course to reach £155 million for the year, rising to £215 million in 2010 and £285 million in 2011. The company has also been working to up revenues from its Global Content division, which brought in £296 million in the half, up 4 percent.

The company also announced today a deal to offload the social networking site Friends Reunited to the D.C. Thomson subsidiary Brightsolid for £25 million in cash. 

Announcing the financials today, Michael Grade, executive chairman, stated: “Into the second half, we have a strong autumn schedule and will deliver further substantial cost savings. Whilst U.K. television advertising remains down year-on-year, the rate of decline has eased and ITV continues to outperform the market. With a lower cost base and high gearing to U.K. television advertising, ITV is well placed to capitalize on any stabilization in the market and to exploit fully the content we create and broadcast as and when economic conditions improve.”