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UK’s ITV sees ad market bouncing back as COVID-19 lockdown eases

Mar 9, 2021

By Paul Sandle

LONDON (Reuters) – Britain’s ITV is poised for a rebound in advertising with demand picking up as the economy reopens from COVID-19 lockdown after a challenging first quarter.

The broadcaster, which aired Oprah Winfrey’s interview with Meghan and Prince Harry on Monday, forecast total advertising revenue would fall around 6% in the first quarter, but added that the trend was positive in March and April, with the latter expected to leap by 60% to 75%.

At the top end that would put revenue on a par with the same month two years ago, Chief Executive Carolyn McCall said after ITV reported a 21% fall in 2020 group earnings.

“We’re definitely seeing a real recovery there,” she said. “Those numbers in April really tell the story.”

She said given the strength of ITV’s schedule and pent-up demand from consumers, the advertising market looked “strong and healthy”, although she cautioned that the government’s plan to ease lockdown had to materialise.

Shares in ITV reversed early losses on Tuesday to rise to the highest level in more than a year. They were up 2% at 125 pence in lunchtime trading.

Analysts at Citi, who have a buy rating on the shares, said year-on-year comparisons would continue to be easy in May, June and July, a period when the broadcaster will be boosted by the Euros soccer tournament and the return of popular dating show Love Island.

ITV said its subscription video-on-demand service BritBox had hit half a million subscriptions in Britain in January, while BritBox US increased its take-up by 50% over the year.

The company on Tuesday reported adjusted group earnings of 573 million pounds, on external revenue of 2.78 billion pounds, 16% down, for 2020.

It suspended its dividend when the impact of COVID-19 became clear. It said the payout would be reinstated as soon as circumstances allowed.

(Editing by Kate Holton, Keith Weir and Emelia Sithole-Matarise)