INSIGHTanalysis: TV Trading Is Very Weak For June

Whilst June comparisons were always going to be tough due to last year’s World Cup activity, the figures are weaker than the industry and analysts had expected. Other reports have suggested that the sector could be down by as much as 14% in June.

The negative figures are affecting all the commercial broadcasters, although ITV is expected to fare worst, possibly down by as much as 17%. Channel 4 and GMTV are set to drop 10%, according to reports. Merrill Lynch had expected an ITV decline of around 8%, but has now reduced its forecast to -12%.

As television bookings are made around two months in advance, the negative climate generated by the war in Iraq is likely to have affected the confidence of trading.

Whilst June is weaker than had been anticipated, indications are that ITV’s May sales are performing better than forecasts from Merrill Lynch. The broker had previously expected a decline of around 8% (see ITV Advertising Forecasts From Merrill Lynch), but current trading suggests that it may only drop by about 3%. April is set to grow by 4%, benefitting from the Easter period.

Merrill is forecasting that ITV revenues will be down by 2.5% in the calendar year, whilst Carlton and Granada will show a 1.8% dip to September (their financial year-end). The overall TV sector is expected to grow by 0%-2% in the full-year.

The latest ITV growth forecasts from Merrill Lynch, along with the previous set of figures, are shown below.

ITV Advertising Growth Trends And Forecasts
ÂÂ	ÂÂ	ÂÂ	ÂÂ	ÂÂ	ÂÂ	ÂÂ	ÂÂ	ÂÂ	ÂÂ	ÂÂ	ÂÂ	ÂÂ	ÂÂ
ÂÂ	January	February	March	April	May	June	July	August	September	October	November	December	Total
2002	-16.0	-16.8	-7.1	-11.6	9.4	10.7	3.9	7.3	1.9	10.1	3.2	-4.1	-1.0
2003	-2.5	-3.5	-5.9	4.0	-3.0	-12.0	-2.0	-5.0	1.0	-4.0	1.0	2.0	-2.5
2004	3.7	3.7	3.7	3.7	3.7	3.7	3.7	3.7	3.7	3.7	3.7	3.7	3.7
Source: Merrill Lynch estimates, April 2003