Interactive Investor

ii view: ITV predicts record ad revenue growth

10th November 2021 11:26

Keith Bowman from interactive investor


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Nine-month trading update to 30 September

  • Revenue up 28% to £2.38 billion
  • Total advertising revenue up 30% to £1.36 billion
  • Online viewing hours up 39% to 494 million hours 


  • Expects total advertising revenue for the full year to be up 24%
  • On track to deliver £30 million of cost savings over 2021

Chief executive Carolyn McCall said:

"By any standards ITV has had an outstanding nine months. Both our Studios and Media & Entertainment (M&E) businesses have performed very strongly.

"Today's results further illustrate that ITV has successfully completed the first phase of its More Than TV strategy and is accelerating the second phase of digital transformation as we evolve our products, user experiences and ways of working."

ii round-up:

ITV (LSE:ITV) today delivered a strong recovery from the depths of the pandemic, with the broadcaster now expecting full-year advertising revenue growth of 24%, the highest in its history.  

Revenue from both its Media and Entertainment and Studios businesses over the nine-month period improved compared to both last year and 2019.

ITV shares rose by more than 11% in UK trading, leaving them at their highest since August and about double their pandemic low in 2020. Shares for global streamer and parks operator Walt Disney (NYSE:DIS) have also doubled, while shares for pure streamer Netflix (NASDAQ:NFLX) are up by around 80% since March last year. 

Aided by the re-opening of the economy, sales for its Media and Entertainment business rose by 26% year-over-year to £1.59 billion, while revenue for its Studios division grew 32% to £1.19 billion.

Its successful digital push underpinned a 39% increase in online viewing over the nine months to the end of September. Video on demand ad revenue surged 54%.

TV advertising revenue grew by 68% in July, buoyed by both the football Euros and its hit show Love Island

Broker UBS highlighted that ITV’s expectations for full total advertising revenue growth of 24% contrasted with its own prior forecast of 20% and a wider market estimate of 17%. Total advertising revenue for the pandemic hit year to the end of December 2020 fell by 11%. 

ii view:

ITV is an integrated producer and broadcaster. It makes, owns and distributes content on multiple platforms globally. It operates through the businesses of Media and Entertainment and ITV Studios. Media and Entertainment includes its free-to-air digital channels and online services such as its ITV Hub and BritBox. ITV Studios creates and produces content in the UK and internationally. Company strategy now includes expanding and strengthening its direct-to-consumer relationships and growing its UK and global production or content business. 

For investors, concerns regarding tough advertising comparatives going forward warrant consideration. A potential junk food prime time advertising ban from the start of 2023 is an overhang too. And ITV’s online services are competing with industry giants like Netflix, Apple (NASDAQ:AAPL) and Walt Disney.

On the upside, ITV is on track to cut £30 million of costs in 2021, its shares remain at a big discount to the big streamers like Netflix, and the dividend payment restarts soon. While ITV has slowly become a smaller player in a world of bigger global giants, its strengths and pedigree are unlikely to be completely forgotten, with the consensus analyst estimate currently standing at around 139p per share. 


  • A recovery in advertising revenue seen
  • Targeting cost savings


  • Now competing against global giants such as Netflix
  • Advertising revenues are economically sensitive 

The average rating of stock market analysts:


These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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