ITV to outperform TV ad market after summer lull
LONDON (Reuters) - ITV (ITV.L) allayed fears about Christmas demand for advertising slots on Tuesday after companies deserted the broadcaster in the summer when the Olympics and Paralympics attracted large audiences for rivals.
Britain's largest free-to-air commercial broadcaster, home to period drama "Downton Abbey" and reality show "I'm a Celebrity, Get Me Out of Here", said net advertising revenue (NAR) for the year would be broadly flat, outperforming the wider television market.
NAR for the nine months to end-September edged ahead of the year before to 1.08 billion pounds ($1.71 billion), it said, as a strong performance from the Euro 2012 soccer championship was offset by drops in July and August, when the London Olympics and Paralympics diverted viewers.
Shares in the group rose 5.6 percent to 91.6 pence by 0928 GMT, topping the FTSE 100 .FTSE leaderboard.
Analysts at Numis said it was a "strong" update, and they upgraded the company to "buy" from "add".
"Despite early scare stories on fourth-quarter advertising which indicated a mid-single digit decline, ITV has outperformed the market and expects Q4 to be down just 2 percent," they said.
"By category, retail has shown improvement after a soft first-half while tech is benefiting from the tablet Christmas and telecommunications from 4G," it added, in reference to the high profile advertising campaign from EE for its new 4G mobile network.
ITV said its production division, ITV Studios, was trading strongly with total revenue up 20 percent to 498 million pounds ($790.2 million).
The company said on Tuesday its total external revenues rose 4 percent to 1.57 billion pounds, with non-NAR revenues up 15 percent to 730 million pounds.
ITV, which currently has "The X-factor" as the centrepiece of its weekend schedule, ended the period with net cash of 90 million pounds.
It said total cost savings would be around 30 million pounds in 2012, 10 million pounds ahead of target.
"The economic outlook remains uncertain and we continue to see monthly volatility in the UK television advertising market, but the underlying trends have not changed," said CEO Adam Crozier. ($1 = 0.6302 British pounds)
(Reporting by Paul Sandle, editing by James Davey)
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