ITV Advertising To Drop By 4% In 2003, Says Broker
ITV’s advertising revenues will fall by 2.5% in the final quarter of the year, giving a full year decline of 4.1%, according to forecasts from Merrill Lynch analysts. This is a slightly poorer performance than the 1.0% Q4 decline recently predicted by Lehman Brothers (see ITV Revenue Forecasts From Lehman Brothers).
For the purposes of comparison, Lehman’s figures have been adjusted in the following tables to refer to calendar year quarters. As the data are based on buyers’ estimates the two sets do not always concur.
| ITV Advertising Forecasts (£m) | |||||
| Q1 | Q2 | Q3 | Q4 | Calendar Year | |
| 2002A | 388.0 | 433.0 | 392.0 | 475.0 | 1,687.0 |
| Change (%) | -12.6 | 2.3 | 4.4 | 3.6 | -0.8 |
| 2003 | 371.0 | 413.0 | 372.0 | 463.0 | 1,617.0 |
| Change (%) | -4.4 | -4.7 | -5.2 | -2.5 | -4.1 |
| 2004 | 382.0 | 437.0 | 383.0 | 471.0 | 1,673.0 |
| Change (%) | 3.0 | 6.0 | 3.0 | 1.9 | 3.4 |
| Source: Merrill Lynch, November 2003 | |||||
| ITV Advertising Forecasts (£m) | |||||
| Q1 | Q2 | Q3 | Q4 | Calendar Year | |
| 2002A | 387.6 | 429.1 | 413.2 | 469.4 | 1,699.3 |
| Change (%) | -13.8 | 1.4 | 11.7 | 5.8 | 1.0 |
| 2003 | 366.9 | 404.6 | 367.5 | 464.7 | 1,603.7 |
| Change (%) | -5.3 | -5.7 | -11.1 | -1.0 | -5.6 |
| 2004 | 385.2 | 424.8 | 389.6 | – | – |
| Change (%) | 5.0 | 5.0 | 6.0 | – | – |
| Source: Lehman Brothers, November 2003 | |||||
ITV has continued to underperform the wider television advertising market in 2003. The market showed Q1 growth of 1.3%, followed by a 1.5% rise in Q2 and a 1.0% rise in Q3. The final quarter of the year is expected to be up by around 2.5%.
Within this, ITV saw Q1 down by 4.4%, Q2 down by 4.7% and Q3 falling 5.2%, according to Merrill Lynch’s figures. The broker is forecasting that Q4 revenues will be off by 2.5% for ITV, with November and December down by around 3.5% each. However, late Christmas bookings in Q4 could still change these figures significantly.
Long term forecast Lehman Brothers has also produced a set of longer term forcecasts for ITV’s revenues, in which the station’s share of net advertising revenue (NAR), including ITV2, will fall from 47.7% this year to 45.6% by 2010.
| Long Term ITV Advertising Forecasts, Year To September (£m) | |||||||||
| 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | |
| Net advertising revenue | 1,522 | 1,485 | 1,552 | 1,614 | 1,679 | 1,738 | 1,799 | 1,862 | 1,927 |
| Growth (%) | -3.9 | -2.4 | 4.5 | 4.0 | 4.0 | 3.5 | 3.5 | 3.5 | 3.5 |
| ITV NAR share (%) | 49.4 | 47.7 | 48.6 | 48.1 | 47.6 | 46.9 | 46.4 | 46.0 | 45.6 |
| Source: Lehman Brothers, November 2003 | |||||||||