Broadcasting giant ITV has blamed Brexit vote uncertainty for its first drop in full-year advertising revenues since 2009 and warned over further falls as ad spend remains under pressure.
The group, home to shows such as The X Factor and Broadchurch, said net advertising revenues dropped 3 per cent to £1.67bn amid “political and economic uncertainty” and cautioned it expects declines of around 6 per cent in the first four months of 2017.
But the group held underlying pre-tax profits largely firm at £847m in 2016 against £843m in 2015 as its push into content helped offset the television advertising woes.
ITV said ongoing economic uncertainty is set to see net ad revenues fall by 5 per cent in January, 7 per cent in February and as much as 15 per cent in March due to the timing of Easter, before recovering in April, with the group forecasting a 5 per cent rise.
Chief executive Adam Crozier said the group performed better than a depressed wider television advertising market, but insisted TV was in “rude health”.
He said: “TV generally is in good shape. The fall in advertising revenues over the course of last year was more to do with short-term uncertainty.”
He added that alongside Brexit caution, ad spend has also been hit as supermarkets and consumer goods firms have instead been investing heavily in price cuts over the past year.
Results showed that on a bottom-line basis, pre-tax profits fell 14 per cent to £553m, due largely to costs of closing its final salary pension scheme and a previously announced restructuring effort to deliver annual savings of £25m.
ITV also announced a special dividend payout for investors worth just over £200m.
The group said that with more than half - 53 per cent - of its revenues now coming from outside advertising sales, it has been able to weather the decline in TV ad spend.
Mr Crozier said: “The continued growth in revenue and adjusted profit, despite a 3 per cent decline in spot advertising revenues resulting from wider political and economic uncertainty, is clear evidence that our strategy is working and remains the right one for ITV.”
The group said it expects further good growth in non-TV ad sales in 2017 and predicted a solid performance from its television production business and online operations.
The group is also pencilling in a £10m profit boost from the weak pound over the year ahead.