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U.K. TV giant ITV reported a 27 percent increase in external revenue in the first half of the year as advertising revenue jumped 29 percent for the period after a 6 percent drop in the opening quarter of 2021.
ITV, led by CEO Carolyn McCall, had previously forecast a first-half advertising gain of around 26 percent, compared to the same period in 2020, saying ad sales have been “rebounding” since April despite continued COVID-19 restrictions.
Ad revenue in May was up 87 percent over the year-ago period and June was up 115 percent. The company said that this meant that it “delivered the largest advertising revenues for the month of June for ITV in its history, benefitting from the easing of restrictions and the Euros” soccer tournament, where England made it to the final. The new season of Love Island also started on June 28.
The second-half comparisons are “tougher,” ITV said, “but we are encouraged by the advertising outlook with July expected to be up 68 percent and August up 17 percent-20 percent compared to the same period in 2020. It is too early to give a range for September given the current uncertainty but we expect it to be positive.”
Asked on an earnings conference call, if the June strength could have been a short-term sugar rush, McCall said: “I hope it’s not a sugar rush.” She also said that with cinemas closed amid the pandemic and other media also hit, TV has benefited.
The company also said that revenue for its production arm ITV Studios rose 26 percent in the first half of the year to £798 million ($1.1 billion). ITV touted “significant new and returning program commissions in (the) U.K. and internationally,” including the fact that “labels within ITV Studios produced six of the top 10 rated dramas in the U.K.”
Ad revenue for the first six months of 2021 amounted to £866 million ($1.2 billion), up from the £671 million reported in the coronavirus pandemic-hit comparable period of 2020, but also exceeding the £849 million recorded for the period in 2019.
In terms of streaming, ITV touted 3 million global subscriptions, including about 550,000 subscribers to BritBox U.K. It added that BritBox International “is performing strongly in the U.S., Canada and Australia with 2 million total subscriptions.”
“Our first-half results demonstrate that ITV is emerging from the worst effects of the pandemic,” said McCall. “We’ve continued to implement our key strategic priorities and have further strengthened the business.” She noted that within advertising, “total video on demand advertising” was up 55 percent.
“We are now a more flexible, more efficient and more digital business,” added the CEO. “We have successfully completed the first phase of our ‘More Than TV’ strategy and look forward to building on this platform to accelerate our transformation to a digitally led media and entertainment company.”
Looking ahead, McCall said: “We are optimistic about the future, despite the ongoing pandemic risk on our advertising and ITV Studios revenues.”
And she said that because “the dividend is important to our shareholders,” ITV hopes to bring back a “progressive dividend policy” with plans for a small dividend for 2021, “assuming the economy continues to recover, “which we expect to grow over time” now that the worst of the pandemic seems to be behind the company. Management curtailed its spending, including abandoning its dividend, in the early stages of the pandemic to preserve financial flexibility.
In late June, ITV said it was moving all London staff to a new headquarters after agreeing to a 13-year lease at the BBC’s Broadcast Centre in the capital’s White City neighborhood “to bring all of its London-based staff into one location for the first time.” The move to the 120,000 square feet of office space will also support ITV’s “smart working initiative and staff feedback on their preferred future working patterns,” it said.
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