ITV hit by Brexit doubts as firms rein in advertising spend

Big advertisers are keeping a tight rein on spending in readiness for Brexit, hitting revenues at ITV.

The broadcaster saw income down 4% in the first quarter to £874 million, with ad sales down a more brutal 7% to £417 million. That’s because big brands — Unilever is a name often mentioned in City circles — have withdrawn ads while they prepare for whatever follows the UK’s much-delayed Brexit.

ITV made mention of “continuing economic and political uncertainty” and the pre-launch costs of BritBox, the mini-Netflix streaming service that it is working on with the BBC. It aims to offer British TV shows old and new.

Chief executive Carolyn McCall said the performance was “very much as expected”. “We remain very focused on delivering in the areas we can control… and we are actively mitigating the factors outside the company’s control.”

ITV’s programming arm, ITV Studios, is doing well. It sold Bodyguard to China just this week and made the BBC hit Line of Duty.

McCall also flagged Manhunt, Cheat, The Bay and Dancing on Ice as shows that continue to perform.

She added: “We have an exciting schedule for the remainder of the year including Wild Bill, Beecham House, A Confession, the Rugby World Cup and the return of Love Island.”

But the firm will be hurt this summer by the lack of the football World Cup, from which it did so well last summer, and not all analysts were as sanguine as McCall.

Liberum dubbed the figures “another disappointment” and downgraded the shares to “hold”.

It said in a note: “There are many things to be positive about ITV, especially on its viewing performance, and the shares are undoubtedly cheap but, with an uncertain political environment and a continuing pattern of downgrades, it is hard to push a Buy case now.”

Richard Hunter, head of markets at Interactive Investor, said: “In its quest to become more than a terrestrial broadcaster, ITV has entered a global arena where competition for viewership is both intense and evolving. The next stage in its progress is not yet obvious.”

The shares slid nearly 3%, down 4p at 128p, leaving ITV valued at £5.1 billion.