23rd Mar 2020 09:02
(Alliance News) - ITV PLC on Monday withdrew its guidance for 2020 and its proposal of its 2019 final dividend, amid disruptions caused by the Covid-19 and resultant containment measures.
The FTSE 100 broadcaster said recent restrictions on working practices have hurt ITV Studios' ability to film productions, leading to productions both in the UK and internationally being paused. ITV said it is unable to predict how the pause in productions would hurt revenue and profit of its studios.
Containment measures implemented by the UK government - which has led to the closure of shops, factories and entertainment facilities - has hurt advertising revenue, resulting in the deterioration of its March and April forecasts, ITV said.
"We have seen further deferrals in advertising which are now coming from across the advertiser categories rather than just in travel, and we are staying in close contact and working constructively with our client and agency partners. The situation remains dynamic and therefore we are not in a position today to give guidance for March or April," the company said.
"Over a full year each 1% decline in total advertising revenue reduces revenue and profit by around GBP17 million before any mitigation."
As a result of the uncertainty of Covid-19, ITV has withdrawn its financial guidance for 2020, as well as its intention to pay an 8 pence annual dividend for 2020. Further, the board has decided not to propose the final dividend of 5.4 pence per share for 2019 at the forthcoming annual general meeting on April 24. ITV said savings realised from these steps will ensure that more than GBP300 million of cash will be retained within the business.
"We are operating in unprecedented and uncertain times, requiring us to take difficult decisions, plan carefully and act with speed. We are actively taking measures to reduce costs and manage our cash flow so that we are best positioned to continue to deliver our strategy of building a digitally led media and entertainment company over the medium term," said ITV Chief Executive Carolyn McCall.
Last Monday, the broadcaster said it has GBP830 million of undrawn facilities and no bond repayments until September 2022.
The stock was trading 8.6% lower at 57.72 pence each on Monday morning in London.
By Ife Taiwo; [email protected]
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