ITV cuts more costs as advertising falls

Expects net first-half advertising revenues to fall 16%

LONDON -- Shares in ITV fell 3% to 31 pence (47 cents) Thursday on news that the commercial broadcaster plans further cutbacks as advertising revenues continue to slide.

The news came as the ITV board said it had hired U.S. executive search consultants Russell Reynolds, suggesting that it may look internationally to find a successor to Michael Grade, who has already said he is expected to step down by the year-end.

ITV, which said in a trading update that group revenues fell 14% to £425 million ($642 million) in the first quarter of the year forecast that ad revenues would be down 16% in May and 18% down in June.

Revenues from broadcasting were down 12% year-on-year to $543 million, while revenue from the global content division fell 3.5% to $85 million on currency transactions reflecting a weaker U.K. pound.

Over the first half of the year ITV's net advertising revenue is predicted to be down 16% overall, narrowly ahead of the total market, which is forecast to slide 17%.

Executive chairman Michael Grade said ITV would cut a further $60 million from next year's budgets bring total cuts for this year to $235 million with $325 million in cuts planned for 2010 and $431 million in 2011.

Speaking ahead of the company's Annual General Meeting, Grade said the U.K. advertising market "remained weak," but said the broadcaster was out-performing the market and was delivering with such shows as "Whitechapel" and "Britain's Got Talent."