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ITV Plc forecast a 6 percent decline in advertising sales in the first half of the year as a Brexit-induced slowdown continues to bite.
Britain’s largest free-to-air commercial broadcaster gave the outlook while releasing first-quarter results that showed a 7 percent drop in total advertising for the period, in line with its previous guidance.
Chief Executive Officer Carolyn McCall is combating near- and long-term trends hitting ad sales, which make up about half of ITV’s revenues. U.K. companies are diverting spending to Brexit planning, while digital players like Facebook Inc. and Alphabet Inc.’s Google steadily draw more of their advertising dollars.McCall is seeking to reduce the broadcaster’s reliance on advertising by expanding ITV’s production unit, maker of hit shows like “Love Island” and “Coronation Street,” and growing its direct-to-consumer division.ITV is also turning to the subscription model that helped make Netflix Inc. into a formidable rival. BritBox, ITV’s new streaming platform with the British Broadcasting Corp. is on track to start in the second half of 2019, ITV said on Wednesday.
ITV shares fell as much as 2.5 percent in early London trading, compared with a 0.3 percent decline for the Stoxx 600 Media Index. ITV’s stock is down 15 percent over the past year.See analyst commentary here.
ITV said total external revenue fell 4 percent in the first quarter to 743 million pounds ($971 million), better than the 736 million pounds forecast by analysts in a company-compiled survey. For the numbers, click here
(Updates with ITV shares in Market Reaction section.)
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