ITV non-exec buys shares worth £99k

As Covid-19 spread from region to region last spring, production studios shut down and television advertisers started trimming their budgets in the face of unquantifiable economic chaos.

For FTSE 100 media giant ITV (ITV), the end result was a “challenging” year. The group revealed last month that sales slipped 15.9 per cent to £2.8bn for the 12 months ending 31 December, while operating profits tumbled a third to £325m.

In turn, the group beefed up the tough measures it had taken in 2020 as it looked ahead to the current year. It expects to deliver roughly £100m of annualised cost savings between 2019 and 2022, compared with earlier estimates of £55-60m. In 2021 alone, ITV anticipates savings of £30m.

But despite its pandemic-induced difficulties, improvements were evident as restrictions started to ease during the summer months. This year, the group said advertising revenues are expected to rise between 60-75 per cent in April with most programmes now back in production.

ITV’s annual numbers came out a day after the UK airing of Oprah Winfrey’s interview with the Duke and Duchess of Sussex. The highly-anticipated broadcast, which reportedly set ITV back £1m, garnered an average audience of 11m – punctuated by lucrative ad slots.

Against a brightening but still uncertain backdrop, one in which streaming giants are only expanding their influence, the attainment of such exclusive TV rights may become an increasingly vital weapon in ITV’s armoury.

In any case, non-executive director Duncan Painter appears to have faith in what’s to come. He bought 82,087 shares at £1.21p apiece on 12 April, totalling £99,006. Painter was appointed in May 2018 and sits on the group’s remuneration committee.

Brokerage Numis expects EPS of 10.4p in 2021, down from 10.8p in 2020, giving a forward price/earnings (PE) multiple of 11 times. Hold.

Last IC view: Hold, 59.7p, 6 Aug 2020