6th Aug 2020 09:07
(Alliance News) - ITV PLC on Thursday offered a bleak picture to investors after its two main sources of revenue took a knock in the first half.
The broadcaster saw its pretax profit for the six months ended June 30 plummet 93% to just GBP15 million from GBP222 million recorded a year ago.
Revenue for the half year fell by 17% to GBP1.45 billion from GBP1.75 billion a year prior.
The company saw its two main sources of income decline: advertising revenue fell 21% to GBP671 million, while production division - ITV Studios - saw a 17% drop in revenue to GBP630 million.
The company said the decline in advertising revenue was "the most severe decline in the history of ITV" after the Covid-19 lockdown in March caused an almost immediate decline in advertising.
ITV however has seen signs of improvement in its advertising trends over July and August.
The pandemic caused around 230 of ITV Studio's productions to be disrupted, with the resulting delay in production and delivery reflected on the total revenue decline mentioned earlier.
ITV said it has decided not to pay an interim dividend in light of continued economic uncertainty.
The company is planning to make GBP25 million to GBP30 million of overhead cost cuts by 2022. It is currently undertaking an internal and external analysis to inform its planning and decision making with regards to the cost cuts.
Looking ahead, ITV said that given the level of uncertainty for both ITV Studios and the broadcast unit it is not possible to provide financial guidance for the third-quarter or the remainder of the year.
Chief Executive Carolyn McCall said: "While our two main sources of revenue - production and advertising - were down significantly in the first half of the year and the outlook remains uncertain, today we are seeing an upward trajectory with productions restarting and advertisers returning to take advantage of our highly effective mass reach and addressable advertising platform, in a brand safe environment."
"The future is still uncertain due to the pandemic but the action we have taken to manage and mitigate the impact of Covid-19 puts us in a good position to continue to invest in our strategy of transforming ITV into a digitally-led media and entertainment company," McCall added.
Shares in the FTSE 100-listed ITV were down 3.9% at 58.48 pence each in London on Thursday morning.
By Greg Roxburgh; [email protected]
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