Coronavirus dents advert sales at ITV as events are cancelled and firms rein in spending
Carolyn McCall, ITV’s chief exec, said it was too early to predict the impact of the virus but it was closely monitoring the situation
ITV has warned coronavirus will hurt advertising income as events are cancelled and firms rein in spending.
Travel companies have delayed ads due to be aired, while promotion of the next James Bond film has been pushed back after its release was moved to November. Advertising around major sports events will also be affected, with Six Nations rugby matches postponed due to concerns about the virus spreading at large gatherings.
That has prompted questions about whether the Euro 2020 football tournament in summer could be called off. The television company said its income from ads in February was up by 8 per cent compared to last year – as a post-election spike boosted the economy – but this has slowed to 1 per cent growth this month, and in April a 10 per cent drop is expected.
Carolyn McCall, ITV’s chief executive, said it was too early to predict the impact of the virus but it was closely monitoring the situation. She said: ‘We’ve seen deferments of some travel advertising in March and April. We are preparing contingency plans across the business.’
However McCall said ITV would also gain income from the outbreak, with the Government preparing to launch an information blitz.
‘The Bond deferment has come at the time when Government spending will balance that off.
‘We don’t know how much they are going to spend yet, but I would say they are putting quite a large campaign together in terms of public awareness and getting people to be calm.’
Her comments came as ITV reported its 2019 financial results, which revealed it had made more money from its production business than from advertising for the first time.
Advertising revenues fell from £1.8billion to £1.77billion in the year to December 31, while income from ITV Studios rose from £1.67billion to £1.82billion.
But one-off costs, including higher spending on programmes, technology improvements and ITV’s investment in streaming service Britbox, meant profits fell from £785million to £693million.
McCall said £25million of cost savings had been made, £5million more than expected.
She also said Britbox – ITV’s venture with the BBC launched in November – is proving popular but did not reveal how many paying UK subscribers it has.
In the US the figure has reached 1m and the service is due to launch in Australia. ITV paid an annual dividend of 8p and says it expects to pay the same in 2020.
Shares fell 12 per cent, or 14p, to 102.5p.