ITV reducing its dependence on ads – MoneyWeek

TheincreaseinITVStudiosrevenuereflectedthefront-loadeddeliveryofanumberofshows,aswellastheinclusionofITVBreakfastproductionrevenuesnowthatDaybreakisproducedbyITVStudios。

ThedivisiondidwellbothintheUKandinternationally,withtheUSchippinginwithafairnumberofcommissions,andtheunitisontracktogrowrevenuesthisyearatasimilarrateto2011。

ITVscoreTVchannels,whatittermsITVFamily,sawtheircombinedmarketshareeasebyacoupleofpercentagepointsinthefirstfourmonthsoftheyear,butwiththeEuropean2012footballchampionshipcomingup,thecompanyisconfidentitwillregainshare。

ITVFamilysNARwasdown1%inthefirstquarterto£362mfrom£365mtheyearbefore,butwiththeaforementionedEuro2012comingupthegroupisexpectingthingstopickupinthesecondquarter,andanticipatesNARinthefirsthalfoftheyearwillbeup3%onthefirsthalfof2011。

Thatguidanceiswellbelowthe6%growthCreditSuissehadbeenexpectingaftertakingsoundingsfromitsnetworkofmediabuyersbut,ontheotherhand,the1%firstquarterdeclinewasnotasbadasthe2%fallCreditSuissehadbeenanticipating。

RichardNunnatCharlesStanleynoted:NARforITVFamilywas-1%forQ1[firstquarter]andbroadlyflatforApril。

Theoutlookisfor+6%inMay,andbetween12%-17%forJunedrivenbyEuro2012championshipfootball,resultingin+3%forH1[firsthalf],marginallybelowexpectations。

Non-NARrevenuerose43%to£290mfrom£203mtheyearbeforewhichmeansthat,afterstrippingoutinter-departmentaltransfers,totalexternalrevenuerose13%to£565mfrom£500minthefirstquarteroflastyear。

WecontinuetopushforwardwithourfiveyearTransformationPlanwithexternalrevenuesup13%inthefirstquarteroftheyeardrivenbyanincreaseinnon-advertisingrevenuesinlinewithourstrategyofrebalancingandgrowingthebusiness,saidAdamCrozier,ITVsChiefExecutive。

RichardNunnatCharlesStanleyimpliesthejuryisstilloutonhowquicklyITVcanreduceitsrelianceonadvertisingrevenues。

ThereareconcernsabouthowquicklyITVcandiversifyingenerating50%ofrevenuesfromnon-ITV1advertisingby2013。

ThislooksevenlybalancedwiththelackofmomentumforITV。

comalthoughITVStudiosisnowbacktogrowth,Nunnnotes。

CurrentlyTVadvertisingrevenuegenerates85%,andwiththeOlympiceffectandtheEurosthisyearthisratioisunlikelytochangeintheshort-term,Nunnreckons。

Nevertheless,CharlesStanleyreckonsthesharesstilllookreasonablevalueonaprice/earningsratioof9。

7timesprojectedearningspershare(EPS)for2012and9。

2timesforecastEPSfor2013。

Thesharesrosebrisklyinthefirsthouroftrading,hitting85。

4pbeforeeasingbackalittle。

Thesharesclosedat80。

75pthedaybeforethetradingupdatewasreleased。

JH

NakedTextNakedText