ITV suffers huge revenue drop as Covid-19 impact revealed

Carolyn McCall

UK commercial broadcaster ITV has revealed the extent of the damage caused by Covid-19 on its advertising revenue, with spending down more than 40% in the second quarter of the year.

The broadcaster, whose half-year numbers were expected to make for dismal reading, saw total revenue drop £300m ($395m) or 17% on last year to £1.45bn while advertising revenue fell 21% across the first six months.

The impact of Covid-19 on advertising spending was most clearly revealed in the Q2 breakdown though, which saw a 43% drop in revenue. Ad revenue fell 23% in July, but CEO Carolyn McCall said advertisers “are returning”.

Global production division ITV Studios posted a 17% drop in revenue to £630m, with most shows put on hiatus during the lockdown period. McCall said in a subsequent earnings call that around 70% of its more than 200 programmes in the works have now returned to filming.

Furlough reduction & response

Around 300 staff remain in furlough, ITV added, down from the more than 1,000 affected during lockdown, but McCall pointed to her pride in the way in which the broadcaster had responded to the pandemic.

The results come after a hugely turbulent six months for the broadcaster, which was among the first to cut a slew of costs including lopping off 20% from the salaries of senior staff, as Covid-19 spread.

Its plan to save £60m is also well underway, with the company reporting that it has to date realised slightly more than £50m of the target, while programming budgets have been slashed by £100m.

She admitted that the period “has been one of the most challenging times in the history of ITV” but said the crisis “helped demonstrate the enduring value of ITV as a public service broadcaster.”

McCall added that the company is now “seeing an upward trajectory with productions restarting and advertisers returning”, while viewership saw a 4% uptick during the UK’s period of lockdown. Online watching was up 13%.

ITV also said that its streaming service BritBox, operated in tandem with BBC Studios, now has 1.2 million subscribers in the US, having only revealed the passing of the 1 million mark in March.

Across the group, adjusted earnings (Earnings Before Interest, Taxes, Depreciation and Amortization) slumped by 50% to £165m, with the broadcaster confirming no dividend would be paid. Pre-tax profit stood at £15m, down from £222m a year before.