Further Revenue Declines Predicted For ITV, Broker Forecasts Downgraded

Reports this week suggest that the hard times are not yet over for ITV. Both Merrill Lynch and ABN AMRO have said that they are now expecting a decline of anything between 10 and 15% in revenue, as opposed to the initial estimate of flat growth for Q3.

July was predicted as the month when ITV could expect to see positive growth again. Now industry estimates at this early stage are suggesting instead that a 20% decline in Q3 will follow a 20+% decline in Q2. The warning comes just over a month after the last downgrades (see Further Downgrades Made To ITV Forecast).

In response these estimates, ABN has reduced its forecasts for the ITV companies Carlton, Granada and SMG. Its forecast pre-tax profit for the year to September 2001 have been reduced by 12.1%, and for the 2002 by 4.5%. For Granada this year’s estimate has been reduced by 11.9% and next years by 14.4%. For SMG profit before tax forecasts for the year to December have been reduced by 8.5% and for next year 9.9%.

The downgrades have resulted in falling share prices for the companies concerned this week. By the close of yesterday’s trading, Granada stood at £1.60, down 9p or 5%, Carlton was down 18p or 4.5% on Friday’s price, at £3.82. SMG was down 14p or 6.4% at £2.03½.

Carlton: 020 7663 6363 www.carlton.co.uk Granada: 020 7620 1620 www.granada.co.uk Scottish Media Group: 0141 300 3000 www.scottishmediagroup.com

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