ITV’s two clearly defined business have had differing fortunes so far in 2022 while group revenue climbed in the nine months to 30th September.
A theme has been building among businesses reliant on advertising and ITV provided further evidence advertising spend was suffering as economic conditions became ever uncertain.
However, while ITV’s ad revenue has declined so far in 2022, total advertising was only 2% weaker at £1.3bn in the nine month period, making ITV share’s 6% drop today seem a bit of an overreaction.
ITV’s group total external revenue rose 6% to £2.5bn helped by strong performance in the ITV Studios business.
ITV’s advertising business is described as resilient by both the company and analysts, and ITV’s content business is becoming the jewel in ITV’s crown.
Non-advertising revenue in the period has exceeded advertising revenue for the second year in a row and raised questions about whether the ITV Studios business is better suited as a stand alone business. This may be reason for today’s fall in ITV’s shares.
“ITV has put in a resilient showing over the first nine months of the year. The shining light comes from the Studios business, where the group’s content-creation powerhouse is growing ahead of the wider sector,” said Sophie Lund-Yates, Equity Analyst at Hargreaves Lansdown.
“This industry is facing structural tailwinds, and these are unlikely to dissipate anytime soon. There are questions swirling about a potential breakup of ITV into its two separate parts, but doing this would leave the more troubling area of the business highly exposed.