For ITV boss Adam Crozier, this year has been like a potboiler that’s instantly gripping, but then fizzles out long before the finale.
In the first half, advertising spending was solid, if unspectacular. Then the Brexit thunderbolt struck. Summer was always going to be tough, with the Rio Olympics showing on the Beeb. But with caution the watchword, retailers, travel companies, banks and insurers pulled in their horns.
It did not get any easier as the evenings began to draw in. ITV enjoyed its best ever September last year thanks to the Rugby World Cup, so ad spending this autumn will have been weak by comparison.
The big question Crozier must answer on Thursday, when ITV publishes its third-quarter trading update, is: will there be a pre-Christmas bounce? That’s about as likely as The Rovers Return becoming a gastropub. Investors are braced for the worst. Crozier may warn that revenues will fall by as much as 9% in the fourth quarter, according to analysts. Little wonder the shares have plunged 40% this year.
You have to feel that — much like its gory crime drama Whitechapel — the gloom has been somewhat overblown. ITV1 remains the only commercial channel that can regularly pull in audiences of more than 5m. If you are the marketing chief of Unilever launching a new brand of washing powder, you’re going to be putting much of your ad budget into ITV. It will remain crucial to advertisers, even as viewers drift away to Netflix and YouTube.
Crozier, who appointed England’s first foreign football manager when he headed the FA, is not shy of taking tough decisions. When he joined ITV in 2010 he quickly dismantled its cadre of top executives and several layers of managers beneath them. The broadcaster is now slashing 120 jobs as part of a £25m cost-cutting plan. Expect more austerity to come.
After their recent pummelling, ITV shares look pretty cheap. According to broker Jefferies, the stock trades at 12 times next year’s projected earnings, with a 7% dividend yield. Buy.
Danny Fortson is away
