ITV share price down 3% after broadcaster warns advertising challenges ahead

ITV ended the fiscal year with a strong set of results on Wednesday, with the British broadcaster owing its success to its production unit ITV Studios and its More Than TV revenue strategy.

But despite recording a positive performance throughout 2018 which saw external revenues increase by 3% to £3.2 million and advertising revenues climbing 1%, the company’s share price took a tumble after the broadcaster warned that ad challenges lay ahead.

‘ITV’s operational performance across 2018 was strong despite the uncertain economic and political environment,’ ITV CEO Carolyn McCall. ‘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.’

ITV results: key figures

Total revenue at the broadcaster’s production unit ITV Studios grew 6% to £1.67 million, with 4% growth in organic revenue, with EBITA up 5% to £255 million.

Broadcast and Online adjusted EBITA slide 7% to £555 million due to increased programming spend and the ITV’s adjusted EBITA dropped 4% to £810 million

‘ITV Studios continued to show good growth producing a range of great shows including The Voice, Bodyguard, Love Island and a host of other hits,’ McCall said.

‘ITV is making good progress as we invest in our More than TV strategy – repositioning the ITV brand, developing our data and digital capabilities, increasing our ability to offer addressable advertising and expanding our direct to consumer activities.’ she added.

ITV share slides despite ‘strong’ 2018 results

The broadcasters full-year results were positive overall, but its share price fell more than 3% on Wednesday morning over concerns about advertising revenue in the years ahead.

ITV’s share price has lost more than 32% of its value in the second half of 2018, with the company’s stock falling from 180p a share in July to 122p by late-December.

BBC and ITV to launch ‘BritBox’ rival to Netflix

In its latest trading update, ITV’s CEO also announced that the broadcaster is in the ‘concluding phase of talks’ with the BBC to establish a new streaming service to rival Netflix called BritBox.

The new service will offer an ‘unrivalled’ collection of British boxsets and original series to UK audiences, with the pair anticipating that other partners and new content will be added to the service over time.