ITV cash flow slows dramatically

Key advertising sales are falling, says Britain’s biggest free to air broadcaster ITV, for the first time since 2009 due to running into tougher comparatives and the economic uncertainty.

The company is home to X Factor and Coronation Street and has said that net advertising revenues decreased in April at a worse rate that what was expected and would also be lower in May and June because last year was the showing of the World Cup.

The drop off was estimated by analysts at 9% for May with an up to 20% drop for June. They did say that comparatives had eased after and that the group would be helped by airing the World Cup for Rugby later in the year.

These outlooks and results are comparable to other broadcasters in Europe such as for example RTL on of Europe’s largest commercial broadcaster that posted a decrease core profit this week due to the ad market still being sluggish.

ITV under new management has attempted to have expectations tempered after many years the business attracted close scrutiny for a string of takeover attempts and very high profile management teams.

The companies stock has dropped over 18% since re-entering in March the FTSE 100 index and Wednesday it dropped an additional 6% because of the weak outlook for both May and June.

CEO Adam Crozier’s message has been to deliver much more that what is expected for low expectations. Many analysts had expected that the April trading would be stronger because  retailers spent so much around the Royal wedding. They still expect to out perform the market on the year as a whole but will remain cautious as to the general path the economic will take.