ITV shares hit year high thanks to predicted ad revenue increase

ITV (LON:ITV) shares hit a new 52-week high today of 69.55p as TV ad revenue has been predicted to grow some 10 per cent year-on-year.

Rob Hull
shareprices.com - Friday, April 16, 2010

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Advertising revenue upward prediction has pushed ITV share prices up

ITV, which attracted over 10 million viewers for the UK’s first party leaders’ election debate last night, hit a year high just after 10:00 this morning putting the media group’s share prices up as much as 4p on yesterday’s closing price.

The sudden jump in share prices was down to a 32-page report released by Goldman Sachs today which listed the current state of media stocks.

And it was ITV that was named as the group with the biggest appeal with TV ad revenue expected to increase by over 10 per cent year-on-year.

The report cited the first half of 2010 as the main contributor, expecting ad revenue to be up by as much as 17 per cent, mainly due to the 2010 FIFA World Cup kicking off in South Africa, last night’s election debate and popular reality programmes including Britain’s Got Talent set to air soon.

The report said: "Special factors that may have somewhat boosted advertising in the first half include the UK election and the World Cup.

“However, we believe that the market is being driven primarily by supermarkets and FMCGs (fast-moving consumer goods companies), followed by a return of automotive and financial spend (particularly in 2Q) and that there has been a limited boost from government spending in March."

Goldman Sachs’ report comes just two weeks after Screen Digest predicted advertising growth would increase by up to 30 per cent in the second quarter of 2010 thanks to the upcoming World Cup.

The Screen Digest report was released around the same time as Ofcom’s announcement that it would allow ITV to restrict the amount of adverts it shows, thus pushing ad price up.

The combination of the two put ITV shares up almost five per cent at the close of March.

Trinity Mirror (LON:TNI) also received a positive mention in the Goldman Sachs report, but share prices remain fairly flat today.

 

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