Studios line gives welcome kick as ads flatline for ITV in 2018
Details
Joseph O'Halloran
| 28 February 2019

The UK’s leading commercial broadcaster may be claiming continued strong operating performance over the year but the reality is that for ITV ads fell flat during 2018 offset by a strong online business and ITV Studios.

For the year ending 31 December 2018, ITV recorded total revenue of £3.766 billion, a yearly increase of 3%, with external revenue up 3% at £3.211 million. Total non-advertising revenue grew 5% to £1.971 billion, now accounting for 52% of total revenue.

Broadcast & Online total revenue was up 1% in the year at £2.096 million but growth in total advertising revenue amounted to just 1%, totalling £1.795 billion. The broadcaster pointed out that the 36% rise in VOD revenue more than offset a decline in net advertising revenues (NAR), which it said was impacted by political and economic uncertainty with a general lack of confidence meaning some corporations were not investing in spot advertising.

By contrast, Total ITV Studios revenue was up 6% on a year-by-year basis at £1,670 million with 4% growth in organic revenue at constant currency. There was also 25% growth in direct-to -consumer revenue to £81 million.

The revenue performances saw overall adjusted EBITA decline 4% year-on-year to £810 million, with adjusted EPS down 4% to 15.4p, with a 5% growth in ITV Studios at £255 million offset by a 7% decline in Broadcast & Online adjusted EBITA of £555 million impacted by investment in the schedule for the World Cup of 2018 and the closure of the Encore business.

Onscreen performance threw up a number of viewing highlights with total viewing up 3%. Total ITV Family impacts were up 1% and online viewing was up 32%. ITV Family share of viewing (SOV) rose 7% and ITV said that during the year it had delivered 98% of all commercial audiences over five million in the UK. ITV reported 265,000 paying subscribers for its Hub+ service and over 500,000 BritBox US subscribers.

Looking to the prospects for 2019, ITV cautioned that economic and political uncertainty continues to impact the demand for advertising as its expected, with total advertising forecast to be down 3% to 4% for the first four months on the year. It warned that first half revenues and profits would likely be also be impacted by what it forecast to be tough comparatives against the revenues of the Football World Cup. Investments being made and ITV Studios deliveries were being weighted to H2.

However it also said that it was confident it would continue to execute well on its strategy and deliver double digit online revenue growth. It expressed particular high hopes for the BritBox UK SVOD service that it was launching with the BBC.

Commenting on ITV's yearly results, chief executive Carolyn McCall said: “ITV's operational performance across 2018 was strong despite the uncertain economic and political environment... We have started 2019 with strong onscreen and online viewing. However, the economic and political headwinds for the UK will have an effect on the advertising market and while ITV is increasingly diversified, we remain sensitive to this...We have a robust balance sheet which enables us to make the right investment decisions to build a growing and sustainable business for the future and to deliver returns to shareholders.”