U.K. TV giant ITV, led by CEO Carolyn McCall, on Wednesday reported a first-quarter revenue drop of 7 percent driven by a big decline at production arm ITV Studios.
It also said April advertising revenue dropped 42 percent amid the novel coronavirus pandemic after a 2 percent advertising gain in the first quarter despite the virus crisis and continued Brexit uncertainty. ITV’s advertising revenue has since been hit by the pandemic, like other TV networks, regardless of higher ratings.
ITV cited a “significant impact on the demand for advertising across most advertising categories, particularly from April.”
At production arm ITV Studios, quarterly revenue fell 11 percent, “impacted by the phasing of deliveries and restrictions on working practices due to COVID-19.”
Earlier this week, ITV unveiled that it has postponed the next season of Love Island to next year because of the pandemic.
ITV has addressed the virus pandemic with what McCall on Wednesday called “swift and decisive action to manage and mitigate the impact of COVID-19.” The company in its quarterly business update unveiled that it has “furloughed around 800 colleagues, broadly 15 percent of our U.K. workforce, the majority of whom work in ITV Studios.” It added: “Internationally we are taking part in other schemes where appropriate.”
ITV on Wednesday also reiterated its previously unveiled plan to cut its programming budget by “at least £100 million,” or $125 million, while doubling its 2020 target for overhead cost reductions to £60 million ($75 million).
McCall said her team was “continuing to reduce costs and tightly manage our cash flow and liquidity” while focusing on the future. “We are now very focused on emerging from this crisis in a strong position, continuing to offer advertisers effective marketing opportunities and making preparations to restart productions safely,” she said.
ITV previously abandoned its dividend and full-year 2020 guidance amid the uncertainty brought on by the virus crisis. The company also scrapped bonuses and cut executives’ salaries to preserve cash. It previously said its cost savings unveiled at that time would help boost its cash reserves by more than 300 million pounds ($350 million), giving it more financial flexibility.
ITV on Wednesday also lauded its ability to bring audiences new programming. “Thanks to the innovation of our production teams, we have resumed production of [talk show] Loose Women this week and have broadcast the first of the acclaimed new Isolation Stories dramas on ITV,” it said. “Across our international markets, we have announced the resumption of filming of The Chase and The Voice in Australia and The Chase in Germany.”
And it is planning a return to production in Britain, saying it “is in the final stages of working with others across the industry on a return-to-production protocol, and we are in active discussions with government on this.”
In a section detailing the impact of the virus pandemic, ITV listed two big negatives: advertising and TV production. “Since mid-March, ITV Studios has had to pause the majority of its productions globally as a result of the restrictions on working practices,” it explained.
But it also listed several positives. “ITV Studios Global Distribution is seeing good demand for library content internationally,” it said. “ITV Commercial is working very closely with advertisers and agencies to create relevant and innovative marketing and advertising opportunities.”
The company also cited “good growth for BritBox free trial starts and subscriptions” and said “interactive revenues are growing well with increased demand for ITV’s competitions.”
However, the fast-moving pandemic developments mean that ITV, like others in the industry, won’t give financial forecasts for now. “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,” the TV giant said. “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.”
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