ITV (LON:ITV) revenues fell over 7 percent in their final quarter of the year, as advertisers prove increasingly cautious over the state of the economy.
The British broadcaster saw revenue drop by 1 percent for the duration of the year, in what marked its worse performance since 2008. Specifically, the final quarter proved particularly disappointing as uncertainty over the post-Brexit economy limited advertiser spending.
“In recent weeks the political and economic uncertainty has increased and we are currently seeing more cautious behaviour by advertisers,” commented ITV chief executive, Adam Crozier.
The steep 7 percent decline reported for the fourth quarter is the worst year-on-year fall ITV has recorded since reporting a 9 percent drop in the last quarter of 2008. This performance proves particularly disappointing given that the figures also include added 1-2 percent revenue generated from their acquisition of UTV, a northern Ireland division that it secured for £100 million.
In response to the lacklustre quarter, Mr Grozier has already announced £25 million in cost savings initiatives for 2017 and last month cut 120 jobs, citing the political and economic uncertainty of a potential Brexit slowdown.
Nevertheless, Mr Crozier remained positive over ITV future, expecting full year earnings to be ultimately strong. ITV’s total revenues increased by 5 percent to £2.15 billion in the nine months to the end of September.
“Our strong on-screen performance and continued ability to deliver mass audiences gives us the confidence that based upon the deals we have done we will also outperform our estimate of the TV ad market in 2017,” Crozier said.
“Even against the current uncertain economic backdrop we expect 2016 earnings to be broadly in line with last year…ITV is now a much more balanced and resilient business”, he continued.
Ultimately, the UK broadcaster has continued to diversify its business, stimulating growith from its online and interactive business and ITV Studios production division.
Despite Mr Crozier’s optimism, ITV still generates over half of its total annual £3 billion in revenue from advertising and sponsorship deals, with 85 percent of revenues coming from the UK market.