27th Feb 2019 08:29
LONDON (Alliance News) - Broadcaster ITV PLC on Wednesday reported earnings growth in 2018 despite the uncertain economic and political environment, but said it expects to see a single-digit decline in advertising revenue in the first four months of its current financial year.
Total external revenue rose 2.6% to GBP3.21 billion in the twelve month to December 31, in line with analysts' expectations, with total revenue up 3.0% to GBP3.76 billion from GBP3.66 billion in 2017.
ITV Studios revenue grew 5.8% to GBP1.67 billion, while Broadcast & Online revenue fell advanced 1.0% to GBPP2.10 billion.
Advertising revenue climbed 0.8% to GBP1.80 billion from GBP1.78 billion in 2017, while non-advertising revenue was up 5.2% to GBP1.97 billion.
On-screen, the company said it has performed strongly with total ITV viewing up 3% to 17.1 billion hours with growth in both linear and online viewing.
Earnings before interest, tax and amortisation declined 3.1% to GBP785 million from GBP810 million.
Pretax profit increased by 13% to GBP567 million from GBP500 million the year before. Adjusted pretax profit declined 4.1%, however, to GBP767 million from GBP800 million in 2017.
According to consensus forecasts, ITV was expected to report adjusted pretax profit of GBP750 million, so ITV slightly beat this consensus.
The FTSE 100-listed firm proposed a final dividend of 5.4 pence a share, taking the total payout to 8p, up from 7.8p paid a year earlier.
This is in line with ITV's intention to pay at least an 8.0p dividend per year in 2018 and 2019. The company expects that over the medium term the dividend will grow broadly in line with earnings.
In addition, ITV said it is in the concluding phase of talks with the BBC to establish a strategic partnership to bring 'BritBox', an "exciting" new subscription video on demand service, to UK audiences. This is expected provide an "unrivalled" collection of British boxsets and original series in one place in competition to Netflix and Amazon Prime.
"We have agreed a joint vision for the service and are now working on a formal agreement," said Chief Executive Carolyn McCall.
Looking ahead, ITV said economic and political uncertainty continues to impact the demand for advertising "as expected", with total advertising forecast to be down 3% to 4% over the first fourth months.
The first half of the year also will show the effect of tough advertising comparatives, the company noted, particularly in June against the World Cup last year. However, ITV said the investments it is making and the timing of ITV Studios deliveries will be weighted to the second half.
"ITV's operational performance across 2018 was strong despite the uncertain economic and political environment," said McCall.
"We have started 2019 with strong onscreen and online viewing. However, the economic and political headwinds for the UK will have an effect on the advertising market and while ITV is increasingly diversified, we remain sensitive to this," added McCall.
ITV shares were trading 1.9% lower on Tuesday at 128.85 pence each.
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