Further Downgrades Made To ITV Forecast

The ITV companies have received further downgrades today (see Further ITV Revenue Slump Expected In April) after the prospects for advertising revenue were deemed worse than ever by media buyers. ABN AMRO has responded to the predicted 15% fall in Q2 revenues by reducing its pre-digital profit forecasts for the year to September 2001 by 7.3% for Carlton, 7.1% for Granada and 7.1% for SMG (year to December).

For 2002 the forecast for Carlton has been reduced by 12.5%, for Granada by 9.4% and for SMG by 8.1%. The 15% fall in Q2 revenues was not expected by the brokers, who had previously predicted a 10% drop. Revenues in Q1 were down 8% and in the fourth quarter of 2000 fell 3.5%. The weakness is being put down to the lack of dot com revenue, thanks to the widespread decline in this industry, the absence of major sporting events and the more general slowdown in the advertising market which is both feeding from and fuelling economic uncertainty at the moment.

The downgrade has yet to take effect on ITV company shares, as by 3.30pm today, Carlton shares were up 13p on yesterday’s price at £4.20, Granada had risen 7¾p to £1.84¾ and SMG remained steady at £1.96.

ABN AMRO: 0207 678 7277 www.abnamro.com

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