ITV on track for double digit full year growth

ITV is on track for a double digit growth in full year profit, after posting a strong third quarter book where a thrilling start to the Rugby World Cup made up for England's poor showing.

The broadcaster released a trading update for the nine months to 30 September on Tuesday which showed total revenue had increased by 13% from 2014 to £2.3bn, driven by a 7% increase in broadcast and online revenue of £1.5bn.

Broadcast advertising revenue took the lion’s share, with net advertising revenue on the ITV Family of channels up 6% to £1.22bn, on par with analysts’ expectations.

The FTSE 100 company forecast that broadcast advertising revenue will be up at least 5% over the full year.

ITV Studios, the production arm, also saw a jump in income, from £608m to £782m for the period, driven by acquisitions and 9% organic growth.

The channels’ share of viewing has also improved in the third quarter, boosted by the Rugby World Cup, daytime programming and soap operas.

“We're on track for another year of double digit profit growth as we continue to strengthen ITV in the UK and internationally,” said ITV chief executive Adam Crozier.

“Looking forward we expect ITV Family NAR to be up at least 5% over the full year, again ahead of our view of the TV advertising market, with growth across all key advertising categories.

“We are confident of further good growth across ITV for the remainder of this year and into 2016 as we continue to exploit our integrated producer broadcaster model in the UK and to build a global content business of scale."

Investec said advertising revenue for the family of channels was in line with what it noted as "conservative guidance".

"Positives are cash and Studios slightly better plus ITV suggests initial outlook for 2016 is 'encouraging'.

"Mid-term TV structural challenges look only part offset by long-term retransmission fee/Liberty Global possible positives. Studios acquisition strategy yet to be proven, given price/content assets acquired."

Analysts at Nomura said the results were largely driven by the studios division.

"As a result, we do not expect this strong 3Q performance to affect FY15 estimates.

"The overall ad forecast at 5.5% for FY15 is also in line with consensus forecasts, which means that overall changes to consensus estimates are likely to be very limited."

The broadcaster also plans to strengthen its broadcast business as looks to completed the acquisition of the television assets of UTV Media.