Broadcaster ITV has cheered improvements in under-pressure television advertising revenues and forecast a return to growth by the end of the year.
The group – home to shows such as The X Factor and I’m A Celebrity – posted a 4% decline in net advertising revenues in its third quarter, better than the 8% tumble in its first half.
It said it expected TV ad revenues to edge 1% higher in the fourth quarter, which is set to see the group outperform the wider market with a full-year decline of around 5%.
But it cautioned over an ongoing hit to advertiser confidence from “political and economic uncertainty” amid Brexit talks.
While TV advertising revenues remained lower in the third quarter, another strong performance from its production arm ITV Studios helped narrow falls in overall turnover to 1% at £2.13 billion in the nine months of its year so far.
Sir Peter Bazalgette, ITV’s executive chairman, said this was “clear evidence of the benefit of rebalancing the business and generating new revenue streams”.
He added: “We’ve seen improving trends in all our key revenue lines in the quarter and we’re on track to deliver on the commitments we set out at the start of the year.
“We are currently seeing a return to TV advertising from some of the FMCGs (fast-moving consumer goods) and grocers although wider corporate confidence in the UK continues to be impacted by political and economic uncertainty.”
The group, which is awaiting the arrival of new chief executive Carol McCall from easyJet in January, gave a breakdown of TV ad revenues showing the decline slowed to 3% in September and is set to rise by 2% this month and 1% in December.
But shares, which have fallen by more than 25% so far this year, dropped another 4% despite the more cheery TV ad outlook.
ITV, which has been leading an effort to increase content production and offset the volatile TV ad market, saw revenues in ITV Studios surge 9% in the first nine months to just over £1 billion.
Analysts at Liberum said: “These roughly stable revenues show that broadcasters are now higher quality companies that do not only rely on TV advertising revenues but also have other sources of revenue that can be high margin and offset any decline in TV ad revenues.”
ITV’s audience figures showed the group’s share of viewing for the ITV “family” of channels remained flat at 34.2 million in the nine months.