Strong start fades as ITV suffers World Cup hangover

ITV warned that its advertising revenues are set to fall a year on from the football World Cup yesterday, but said that further progress had been made with its five-year overhaul plan.

The broadcaster reported an 11 per cent rise in revenues from £450m in the first quarter of 2010 to £500m a year on.

Adam Crozier, ITV's chief executive, backed the positive start to the year in which the group outperformed the TV advertising market, with revenues up 12 per cent. Yet, he cautioned: "We expected that the ad market in the second quarter would be difficult given the very tough comparators and the continued economic uncertainty."

He added: "As we anticipated, tough ITV1 World Cup comparators in June mean we may slightly underperform the market in the first half."

Numis' analyst Paul Richards said: "The first quarter got off to a great start but it has faded somewhat since." He added the outlook for the year was good because of another World Cup, this time rugby, which will be shown on ITV in the autumn. The emergence of new revenue streams such as product placement and online streaming "will also be positive", he said.

Mr Crozier said the group had invested in making ITV Player easier to use and introducing it on to a wider range of smartphones and tablets, after criticising ITV's online performance last year. "Investing in new programmes and a greater focus on in-house production are also key to our transformation," he added.

"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, adding that the overhaul was "making good progress". Shares in the broadcaster fell 5 per cent to 71.9p.

Channel 4 also reported yesterday. It posted a full-year revenues rise of 12.6 per cent to £935m in 2010 with operating profits up from £3.9m in 2009 to £49.3m. The broadcaster also slashed losses at its flagship channel by 87 per cent to £7.7m. David Abraham, C4's chief executive, said: "2010 was a year of transition and Channel 4 has entered 2011 ready for the future."

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