ITV sees surprise ad revenue increase

By Julie Crust

LONDON (Reuters) - ITV Plc (ITV.L), Britain's biggest commercial free-to-air broadcaster, forecast a surprise upturn in advertising next month, sending its shares up more than 8 percent.

The company, home to shows such as X Factor and Coronation Street, said on Thursday its ITV1 channel was extending its lead over BBC1 in peak time viewing, helping lure advertisers and allowing it to forecast a 4 percent rise in net advertising revenue (NAR) in December.

The increase would be the first monthly gain since the first half of 2008 and could end a dismal period in which ITV seemed to be inexorably losing viewers and advertising revenue.

"We brought forward this announcement in view of the significant improvement in trading, over and above the improvement confirmed in our trading update last month," said Chief Operating Officer John Cresswell on a conference call.

"We continue to see the quarterly trend in our TV advertising performance improving."

The broadcaster, which is still struggling to find a new chairman and chief executive, expects NAR in November to fall 1 percent, better than the decline of around 3 percent forecast last month, and NAR for the fourth quarter to be flat, taking the full year down 12 percent after the worst advertising recession on record.

IMPROVING OUTLOOK

Total revenue for the nine months fell 11 percent to 1.31 billion pounds.