ITV revenues impacted by Covid but CEO remains confident as production is back on track

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ITV’s full year revenues have been hit by the pandemic but CEO Carolyn McCall, remains positive.

Total external revenue was down 16 per cent to £2.7bn for the year to December 31, 2020.

This includes a 25 per cent drop in revenues at  ITV Studios, impacted by the disruption to the majority of ITV productions from March 2020 when the first UK lockdown was declared.

Total broadcast revenues were down by 8 per cent, with total advertising down 11 per cent.

Adjusted Group EBITA was down 21 per cent at £573m which it said was better than external expectations, driven by the strong end to Q4 and tight cost control delivering £116m of overhead savings of which £21m are permanent.

The broadcaster, which aired Oprah Winfrey’s interview with Meghan and Prince Harry last night reported a 1 per cent increase in total viewing for 2020.

However, online viewing was down 5 per cent due to the lack of big hitters including Love Island, fewer soaps and no major sporting events.

However, the group said it has a ‘strong schedule’ for 2021 including The Pembrokeshire Murders, Finding Alice, The Bay, Dancing On Ice and The Masked Singer.

CEO Carolyn McCall said: “Throughout this last year, we have all been dealing with the effects of the pandemic.  As the UK’s largest commercial network, we’ve worked hard to fulfil our responsibility as a source of reliable and trusted news and to deliver some of the best entertainment into the country’s homes.

“I’m proud of the work of all our colleagues and thank them for their dedication, creativity and hard work to successfully manage our way through the crisis while continuing to invest in our strategy.  Our production teams were very innovative in restarting productions quickly and safely in the UK and internationally, while our commercial colleagues inspired advertisers to restart their marketing campaigns.”

She added: “We are encouraged by the roadmap out of lockdown. We are seeing more positive trends in the advertising market in March and April and the majority of our programmes are now back in production.

“However, there remains uncertainty in all markets around the world with the potential risk of lockdowns, which if they materialise will affect revenues. We are committed to taking further cost out of the business while further investing to accelerate the delivery of our strategy and digital transformation.”

Analyst Russ Mould, AJ Bell investment director, said: “ITV should benefit from some very soft comparatives year-on-year through the course of 2021 given advertising budgets were virtually frozen for a time in 2020 and the delayed Euros football tournament will provide a boost this summer assuming it goes ahead. Investors will hope the company is in a position to resume dividends sooner rather than later.

“The production business, which provides a less volatile revenue stream than advertising, is also back up and running, though hampered by additional Covid-related costs.”

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