LONDON ITV (ITV.L) said its advertising revenue could fall by nearly 10 percent in the first half of the year, as intense competition and weak markets meant outgoing boss Adam Crozier prepared to sign off with the company facing familiar problems.
Crozier, who has restored the British broadcaster's fortunes during his seven years in charge by reducing its reliance on advertising and expanding its production business, is leaving at the end of June.
He departs with the group battling the same volatile advertising markets that he inherited. But a boost from the weak pound for its Studios business and an increasing number of viewers on-screen and online meant the group was at least able to reiterate its full-year targets.
"ITV's overall performance and the shape of the UK advertising market are very much as we anticipated and our guidance for the full year remains unchanged," Crozier said, adding that the economic environment remained uncertain.
However, he warned that net advertising revenue could be down by as much as 20 percent in June when ITV faces tough comparisons with last year when it was able to screen the European football championship.
Advertising revenue fell by 9 percent in the first quarter. It rose by 5 percent in April, as expected, and is forecast to be down by 8 percent in May.
Shares in ITV fell 2.5 percent to 196 pence by 1040 GMT, extending losses since Crozier announced his departure last week to 7 percent. The shares were trading around 50 pence when he was named as the new boss in early 2010.
Outside of the advertising business, the rest of the company performed well. Revenues at ITV Studios grew by 7 percent in the first quarter, including the currency benefit, while its biggest channel won a 4 percent bigger share of the audience.
Neil Campling, global head of TMT research from Northern Trust Capital Markets, said ITV faced increasing competition from the likes of Amazon and particularly Netflix which is moving into the production of reality programming, an area of strength for ITV Studios.
"While ITV faces easier comparatives in the second half of 2017 post the Brexit shock in the second half of 2016, we feel the structural challenges facing traditional media companies have never been greater," he said. "We remain sellers of ITV."
ITV's shares have been propped up in recent years by takeover speculation, notably by Virgin Media-owner Liberty Global (LBTYA.O), which owns a 9.9 stake in the broadcaster.
However Liberty CEO Mike Fries dampened the speculation on Monday when he told analysts that Crozier's departure did not change the company's position on ITV.
"If ITV was trading at a much lower multiple it might be interesting," he said, according to a transcript of the call. "Where it is trading today and the premium required, it is not interesting."
(Reporting by Kate Holton and Paul Sandle; Editing by Keith Weir)