U.K. TV giant ITV on Wednesday reported slightly improved first-quarter revenue, but revenue at the ITV Studios production unit, which is typically a growth driver, was down 4 percent.
The company also said that ratings trends early in the year were below its expectations, but management expressed confidence for the remainder of the year.
Organic revenue, excluding acquisitions, which have been a key contributor for the company, was down 10 percent at ITV Studios, or 8 percent assuming constant currencies.
”The timing of program delivery can significantly impact Studios’ revenues on a quarterly basis as it has done in the first quarter,” said ITV, the U.K. on-air home of Downton Abbey and The X Factor.
“Given the level of forward visibility we have in our studios business, we are confident of delivering good revenue growth over the full year driven by the acquisitions we have made,” said CEO Adam Crozier.
However, the company warned that if exchange rates stay at a similar rate over the remainder of the year, the full-year drag on revenue will be around $42.2 million (£25 million) and about $6.7 million-$8.4 million (£4 million-£5 million) on operating profits.
Total ITV revenue rose 1 percent over the year-ago period to $1.13 billion (£672 million) as net advertising revenue was up 2 percent.
“We continue to make progress with our strategy of growing and rebalancing the business in the U.K. and internationally. Broadcast and online started the year well, helped by another strong performance in online, pay and interactive and by the ongoing improvement in the U.K. advertising market, with most sectors showing good growth,” Crozier said.
He added: “While ITV family share of viewing has been lower than expected so far this year, we have confidence in our strong schedule to come, including the [soccer] World Cup in June. ITV Encore — our first pay channel — is on track to launch in June, followed later in the year by ITVBe, our first new free-to-air channel in almost a decade.”
Looking ahead, the CEO said that second-quarter advertising revenue is likely to be up 12 percent-13 percent at ITV. “We expect to outperform the TV ad market in the first half and over the full year,” Crozier said.
He also referenced last week’s acquisition of Leftfield Entertainment, the fast-growing U.S. production company behind Pawn Stars. “The acquisition makes ITV Studios the largest independent unscripted producer in the U.S. and is a major step forward in our strategy of building an international content business,” Crozier said. “We are also investing in the organic growth of our international scripted business, which will benefit our growth in future years.”