In keeping with other analysts and forecasters, Merrill Lynch has downgraded its ITV revenue forecasts citing “growing evidence of advertiser cutbacks or switching” in the TV advertising market.
Merrill now forecast ITV revenue growth at -12.3% to September 2001 and see no reason to expect a recovery until around April 2002. Growth for the year to September 2002 is now forecast at 1%.
The net result for Carlton is £32 million off revenues and a £28 million increase in 2002 pre-tax losses (from £92 million to £120 million). 2003 estimates put losses increasing from £26 million to £46 million, although ad revenue growth for 2003 is forecast at 6.5%.
The outlook for Granada is equally gloomy with 2002 pre-tax profits forecast to fall from a predicted £65 million to £32.5 million.
The forecast of a 30,000 rise in subscribers to ITV digital compares badly to the forecast of 160,000 for Sky Digital and continuing concerns over the high churn rate of ITV digital and high spending on ITV Sport means that no recovery is forecast for ITV until mid 2002.
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