Merrill Lynch Cuts ITV 2003 Airtime Revenue Forecasts

Granada reported that ITV1 airtime sales grew slightly in the first half, by 0.2% to £436 million. Whilst this performance is stronger than generally expected, Merrill says that trading for ITV and the TV market as a whole has deteriorated, with poor monthly performances looking set to be a feature of the year.

Indications for June and July are weaker than anticipated. Granada said only that June would be down year on year, largely as a result of last year’s World Cup boost; it did not offer specific figures. The broker reckons that total ITV revenues in June will be down by 20%, with July down by 10%.

Accordingly, Merrill Lynch’s previous forecast of -1.8% growth for ITV1 NAR in the year to September (see ITV Advertising Forecasts From Merrill Lynch) has now been reduced to -2.5%. For the 2004 financial year to September, Merrill is expecting 3.7% growth.

ITV1 Advertising Growth Forecasts
	Year on year growth (%)
ITV1 Jun 2003	-20.0
ITV1 Jul 2003	-10.0
All TV FY2003	0.6
ITV1 FY2003	-4.0
ITV1 year to Sep 2003	-2.5
All TV year to Sep 2004	5.0
ITV1 year to Sep 2004	3.7
Source: Merrill Lynch, May 2003

On the whole, market-watchers are hanging on until 2004 when an economic recovery, better advertising share and the proposed Carlton/Granada merger could all contribute to a stronger trading market for ITV.