6th May 2020 08:24
(Alliance News) - ITV PLC on Wednesday said its advertising revenue fell by more than 40% in April and the broadcaster has been forced to furlough 15% of its UK workforce due to the Covid-19 pandemic.
Due to a "significant impact" on demand, advertising revenue, a large contributor to revenue, slumped 42% in April.
Advertising revenue did edge 2.2% higher year-on-year to GBP426 million over the three months to March 31, ITV's first quarter, a period which for the most part was spared from the financial bite of the Covid-19 pandemic.
Total first quarter revenue was 3.7% lower annually at GBP842 million from GBP874 million in 2019. Broadcast revenue edged 2.2% higher to GBP500 million, but in production arm ITV Studios it was 11% lower at GBP342 million.
External revenue, which includes the advertising and non-advertising contribution, fell 6.5% year-on-year in the first quarter to GBP694 million.
Total viewing hours were 1.6% higher at 4.43 billion in the first quarter.
ITV had to put the brakes on a majority of its productions back in mid-March due to the Covid-19 outbreak.
Chief Executive Carolyn McCall said: "ITV has taken swift and decisive action to manage and mitigate the impact of Covid-19, by focusing on our people and their safety, and by continuing to reduce costs and tightly manage our cashflow and liquidity. We are also ensuring that we continue to inform and entertain our viewers and stay close to our advertisers."
The company said it will cut overhead costs by GBP60 million in 2020 and has sliced GBP100 million from its programme budget.
It has furloughed 800 employees, about 15% of its UK workforce, and has implemented a recruitment and salary freeze.
Its final 2019 dividend has been withdrawn.
"ITV is planning a phased approach to office re-entry in consultation with external medical advisers to align with how the government plans to approach relaxing restrictions," the company said.
"The outlook remains uncertain and is changing rapidly and therefore we are not giving guidance for the second quarter or for the remainder of the year. We are using rigorous internal and external analysis and scenario planning to continue to monitor the Covid-19 situation and its impact on the business. This is informing our planning and decision making and we will take further action as necessary to manage our costs and cash tightly."
ITV shares were 3.0% higher at 74.33 pence each in London on Wednesday morning.
By Eric Cunha; [email protected]
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