ITV Shares Advance as Content Creation Attracts More Revenue
ITV Plc (ITV), owner of the U.K.’s biggest commercial TV station, rose the most in eight months after first-half earnings increased as the company focused on creating content and bought production assets.
Earnings before interest, taxes, amortization and exceptional items climbed 11 percent from a year earlier to 291 million pounds ($446 million), the London-based company said in a statement today. Revenue climbed 2.3 percent to 1.31 billion pounds, beating analysts’ average estimate of 1.15 billion pounds, according to data compiled by Bloomberg.
ITV, whose shows include “Downton Abbey” and “X Factor,” has been reducing its dependence on advertising by investing in content creation and acquiring production assets. Non-advertising revenue rose 11 percent in the first half to 568 million pounds, the broadcaster said.
“We’re making good progress with our strategy of growing and rebalancing the business as we build new revenue streams and improve margins,” Chief Executive Officer Adam Crozier said in today’s statement.
The shares rose as much as 6 percent, the biggest intraday advance since November, and were up 5 percent at 164.90 pence as of 9:41 a.m. in London. The stock has climbed 57 percent this year, giving the company a market value of 6.5 billion pounds.
“We remain firm supporters of ITV, which is executing well on rebalancing the group by deploying cash flow into building ITV Studios, while we view it as a natural play on UK macro recovery,” Paul Richards, an analyst at Numis Securities who recommends adding the stock, wrote in a note today.
Net advertising sales from ITV Family declined 3 percent in the first half because of tough second-quarter comparatives, the broadcaster said today. The division should have “broadly flat” net advertising revenue for the nine months to the end of September 2013 after rising 9 percent in the third quarter.
Revenue at content-production arm ITV Studios increased by 11 percent to 395 million pounds, according to the statement.
ITV last week said it paid an initial 12.5 million pounds for Big Talk Productions, producer of films including “Shaun of the Dead” and TV series such as “Rev.”
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