ITV Quarterly Revenue up 14 Percent, Led by Production Arm; Brexit Fears Weigh on Advertising

ITV CEO Adam Crozier

The U.K. TV giant, led by CEO Adam Crozier, expects roughly unchanged first-half ad revenue, saying the Brexit debate has caused "uncertainty in the U.K. advertising market."

U.K. TV giant ITV, led by CEO Adam Crozier, on Thursday reported a first-quarter revenue increase of 14 percent to $1.09 billion (£755 million).

The growth was driven by production arm ITV Studios, but advertising revenue was roughly unchanged, with the company saying the debate ahead of a June 23 referendum about Britain's possible exit from the European Union was affecting marketing spending decisions.

Revenue at ITV Studios rose 44 percent to $465 million (£322 million), driven mostly by acquisitions. The company said it was on track for full-year double-digit revenue and profit growth at the production arm.

"ITV Studios performed strongly in the first quarter with our acquisitions coming through," said Crozier. "We have a healthy pipeline of new and returning programs, including Victoria, Cold Feet, The Voice and Alone, which gives us confidence for the full year and into 2017."

But ITV's first-quarter net advertising revenue, a recent concern for analysts, was unchanged from the year-ago period in percentage terms, and down minimally in absolute terms. ITV said it anticipates its network family to see first-half net ad revenue to be "broadly flat and ahead of the market" after a 13 percent April drop. It said May is expected to be flat, but June should be up 15 percent.

"ITV is now a much stronger and more diverse business and we expect to deliver good profit growth in the first half," Crozier said. "This is against the backdrop of uncertainty in the U.K. advertising market, which we have experienced since the debate over Brexit began, and significantly higher share of our program spend in the first six months."

ITV's share of viewing was up 3 percent in the quarter, with the whole ITV family's share of viewing up 1 percent. Broadcast and online revenue rose 2 percent, with "continued strong growth in online, pay and interactive," which was up 17 percent.