ITV Plc, the U.K.’s biggest commercial broadcaster, dropped the most in more than six months in London trading after it said the outlook for television advertising is unclear following the U.K. election.
“The outlook for the latter part of 2010 and early 2011 is tough with more testing year-on-year comparators and uncertain market conditions post-election,” Chief Executive Officer Adam Crozier said today in a statement. The stock fell as much as 7.7 percent.
Crozier, who took over as CEO last month, is seeking to boost ad sales as competition from the Internet has increased and clients cut marketing budgets amid the economic slowdown. Partial results from yesterday’s election put the Conservatives on course to win the most seats, without gaining an overall majority. Gilts and the pound fell on the indecisive result.
“They’ve got no visibility,” Paul Richards, an analyst at Numis Securities in London, said via phone. “July will be good with the World Cup, but it all hinges on the outlook for September through to November, which are the biggest months of the advertising year.”
ITV fell as much as 4.7 pence to 56.3 pence, the biggest drop since Oct. 28. The shares traded at 58.2 pence as of 8:46 a.m., giving the company a market value of 2.3 billion pounds ($3.4 billion).
First-quarter sales rose 6 percent to 450 million pounds from 425 million pounds a year earlier, the London-based company said today. It predicts revenue from TV advertising will grow 22 percent in the second quarter after rising 8 percent in the first, as advertisers boost spending for the soccer World Cup.
The broadcaster is currently reviewing its programming budgets and may increase investment by 20 million pounds in 2010, Richards said.