ITV predicts flat advertising revenue

ITV is predicting flat advertising revenue for the first half of this year, but is still expecting to outperform the 1 per cent fall forecast for the market as a whole.

The commercial broadcasting group has lost almost half its value in the past 12 months, partly in response to concerns about online TV, the fragmentation of audiences and the impact on advertising income. Michael Grade, the chief executive, says the group is on track to deliver the turnaround plan outlined last autumn. But ITV's share price fell by another 1.59 per cent to 61.9p yesterday, despite first-quarter figures showing overall revenues up by 3 per cent to £492m and net advertising income up by 2 per cent. Revenue from the broadcasting operation fell by2 per cent to £409m.

"The forecast for the first half shows us outperforming the UK television advertising market – the first time this has happened since 2000 – and across ITV as a whole we are sustaining operational momentum in all parts of the business," Mr Grade said. "Given the wider economic context, the television advertising market has held up relatively well... In an uncertain economic environment, ITV continues to deliver advertisers real value and unique effectiveness across ITV1 and its digital channels."

The group's strategy includes delivery of compound annual growth of between 3 and 5 per cent over the next three years, maintaining commercial audience share at 38.5 per cent and boosting its digital business to £150m by 2012.

"Online, ITV is making progress with its strategy of maximising exploitation of programming, attracting more users online and, increasingly, engaging those users in video content. Video views across ITV sites have increased 76 per cent since the start of the year to reach 9.9 million last month," Mr Grade said.