Covid-19 has blown a serious hole in ITV’s (ITV) advertising revenues – knocking these by just over a fifth to £671m during the first half, after falling 43 per cent in the second quarter alone. The pandemic also led to the delay or cancellation of sports and live entertainment shows and content creation on hold. This dampened sales for both the group’s broadcasting division and its ‘ITV Studio’s production wing by 17 per cent.
Further down the income statement, statutory operating profits tumbled by almost half to £159m on a margin of just 14 per cent – down from 22 per cent a year earlier. Little wonder, perhaps, that chief executive Carolyn McCall described the respective six months as “one of the most challenging times in the history of ITV”. For now, the media giant has put financial guidance – and the dividend – on ice.
ITV said that linear television viewing remained “resilient” during the period under review, despite the popularity of alternative streaming platforms. But, ostensibly, we should not be overly-optimistic; according to regulator Ofcom's latest 'Media Nations' report, broadcast TV viewing declined as lockdown measures eased, while subscription-video-on-demand content “retained much of its lockdown uplift” in June.
Numis forecasts adjusted EPS of 8.1p for 2020, down from 13.8p in 2019.
ITV (ITV) | ||||
ORD PRICE: | 59.68p | MARKET VALUE: | £ 2.4bn | |
TOUCH: | 59.68-59.74p | 12-MONTH HIGH: | 166p | LOW: 50p |
DIVIDEND YIELD: | 9.0% | PE RATIO: | 8 | |
NET ASSET VALUE: | 23p | NET DEBT: | 81% |
Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2019 | 849 | 222 | 4.8 | 2.6 |
2020 | 671 | 15.0 | 0.5 | nil |
% change | -21 | -93 | -90 | - |
Ex-div: | na | |||
Payment: | na | |||
*Includes intangible assets of £1.6bn or 40p a share |