Ad revenue up but ITV wary over future

While the popularity of dramas such as Marchlands and Monroe lifted its performance in the first quarter, it is braced for this to reverse over the next two months due to comparisons with the football World Cup last year.

The group expects to post a rise in first half advertising revenues of between 1 per cent and 2 per cent, implying its first fall in ad growth in a quarter since 2009.

April saw a 6 per cent rise, but revenues in May and June are expected to fall sharply. Analysts have suggested ITV could see revenues drop by as much as 20 per cent in June.

Investment bank UBS has revised down its full-year ad growth forecast from 4 per cent to 2 per cent and also trimmed its full-year earnings prediction.

The success of its new programmes helped boost ITV1’s viewing share by 3 per cent in the first three months of 2011, while ITV’s overall income for the first quarter rose by 11 per cent to £500m driven by the 12 per cent pick up in advertising.

New, original programmes are seen as key to a five-year turnaround plan for ITV set out by chief executive Adam Crozier.

Last year’s runaway success for Edwardian costume drama Downton Abbey has sparked a rush of new commissions. New productions in the pipeline include The Jury and Titanic.

“We still expect to see an increase in ad revenues for the first half of the year,” Mr Crozier said, though he added: “The World Cup comparators in June may mean we underperform the market in the first half.”

He also expressed some caution on trading over the rest of the year, though he expects ITV to outperform its rivals. “The continuing volatility in the TV advertising market underlines the need for us to keep firmly focused on our five-year transformation plan,” Mr Crozier said.