ITV sees encouraging signs after profit declines

ITV said it saw encouraging signs across its business as the broadcaster reported a 16% drop in revenue for the first nine months of 2020.

Total revenue fell to £2.17bn from £2.58bn in the nine months to the end of September. Total external revenue dropped to £1.86bn from £2.21bn. Broadcast revenue fell 13% to £1.27bn and production income declined 19% to £902m.

The maker of Love Island and Coronation Street said its ITV Studios production arm had restarted most programmes but that delays, new Covid-19 lockdowns and other constraints would affect revenue and margin in the fourth quarter and into 2021.

The FTSE 250 group said total advertising revenue would be about 6% higher in the fourth quarter than a year earlier assuming England's coronavirus lockdown ends on 2 December.

Chief Executive Carolyn McCall said: "We are seeing encouraging signs in both our divisions. Advertising trends are improving with Q4 forecast to be slightly up year on year and 85% of our productions in the UK and internationally that were paused as a result of Covid-19 are back in production or have been delivered.

"However, Covid restrictions and further national lockdowns have added production costs and are making it challenging to bring ITV Studios productions back to full capacity."

ITV said it was on track to achieve its cost saving target of £60m for 2020, including £10m of permanent reductions. The company has been hit hard by the Covid-19 crisis. It was forced to halt production of many programmes during the first lockdown and advertisers facing their own problems have reduced spending.

The shares fell 0.8% to 89p at 08:57 GMT.