ITV - is it a step in the right direction

Wednesday, 25th July 2018 09:38 - by Rajan Dhall

The results on the face of it for the television broadcaster are not bad, but where I think investors will struggle is the breakdown of the new strategy. Longer-term diversifying your revenue makes sense, it's clear there is a big move over to digital programming ie. phones and the internet and producing your own content seems to be vital in attracting new viewers.

I think moving into data analytics is also a smart play, it will just take a while to achieve but with the number of online users the company has it should not be too much of an issue - but in my mind they should make some premium content online only to attract more views. 

Results:

•  Total external revenue up 8% at £1,593 million (2017: £1,469 million) with non-advertising revenues up 14% at £958m (2017: £837 million)

•  Total ITV Studios revenue up 16% at £803 million (2017: £692 million), including £12 million of unfavourable currency impact

•  ITV total advertising revenue up 2% as expected, with 48% growth in Online

•  ITV Studios adjusted EBITA up 7% at £118 million (2017: £110 million)

•  Broadcast & Online EBITA down 12% to £257 million (2017: £293 million) reflecting the timing of the Football World Cup as previously guided

•  Adjusted EBITA down 7% at £375 million (2017: £403 million)

•  Adjusted EPS down 8% at 7.1p (2017: 7.7p)

•  Statutory EPS up 4% at 5.3p (2017: 5.1p)

If I am honest I feel the Co. didn't capitalise on the world cup as much as they could have the revenue generated from the even seems slightly low. This does not have seemed to scare the markets as investors still look to invest in the company. Looking at the price chart you can see on weekly chart we are at relatively low levels. The volume profile over on the left is suggesting we are at the price area where most shares have been traded so a rejection here could be key. Normally when price breaks a trendline it comes back to test and this also looks like that moment and rejection candle at the end of the week could indicate a move higher. 

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.