A tough advertising market hit earnings at broadcasting giant ITV in 2017, forcing profits down 6 per cent on the year before according to its latest results.
Net advertising revenue at the group fell 5 per cent last year to £1.59billion, dragging on earnings and off-setting off-setting a 2 per cent increase in total revenue and a 13 per cent hike in revenue in the group’s production arm, ITV Studios.
Overall group profits before tax fell to £800million, down from £847million in 2016.
Tough economic conditions have seen advertisers hold off spending with ITV advertising revenue down 5 per cent in 2017
In the first set of results since becoming chief executive, former easyjet boss Carolyn McCall said ITV has managed a strong performance in a ‘challenging environment’.
‘ITV delivered a great viewing performance on-screen and online and double-digit revenue growth in video on demand advertising and ITV Studios. This gives us a solid foundation to build on for the next phase of ITV’s development,’ she said.
The group is conducting a strategic ‘refresh’ to address the challenges faced within broadcast media she added.
McCall, who replaced former chief Adam Crozier in January, added that 2018 had gotten off to a good start and that more than 60 per cent of the expected revenue for the group was already booked.
The group’s dividend was increased for the year, rising 8 per cent to 7.8p a share.
Investors failed to be swayed however, with ITV’s share price falling more than 7 per cent in early trading to 159p.
Its broadcast and online arm saw earnings fall 7 per cent to £599million last year, down on £642million in 2016 after advertising revenue came in £81million lower than a year before.
New boss: Carolyn McCall became chief executive in January and said the group performed well in ‘challenging’ conditions
Online viewing remains a growing business and grew by 39 per cent at ITV last year.
The likes of Broadchurch, the most watched drama of the year, Victoria, and returning shows such as Ant and Dec’s Saturday Night Takeaway, I’m a Celebrity Get Me Out of Here and Love Island helped boost figures in 2017.
Shows such as The Voice and The Voice Kids, as well as new dramas such as Liar, were ‘successfully launched’ the group said.
Popular hosts: Ant and Dec are among ITV’s biggest stars and host some of its well-known shows such as I’m a Celebrity Get Me Out of Here
However others including The Nightly Show, Fearless and Bigheads ‘did not perform as well’ as hoped and ‘will not return in 2018’ it said.
Connor Cambell, a financial analyst at firm Spread Ex, said: ‘The media firm is continuing to struggle with an advertising slowdown.
‘Investors were understandably upset with a 6 per cent drop in pre-tax profit to £800 million.
‘New CEO Carolyn McCall’s promise that ITV would deliver positive NAR growth in Q1 and Q2 failed to adequately distract from that headline decline, with the stock plunging 7 per cent.’
However Campbell added: ‘The good news for ITV investors, however, might be that any further fall in price could reignite the takeover rumours that have lingered around the company for a while now.’