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(Alliance News) - ITV offered a bleak picture for investors on Thursday.
The UK television broadcaster and programme maker was unable to provide financial guidance as the fallout from Covid-19 hit half-year earnings, and it decided to pay no interim dividend.
For the half-year ended June 30, revenue fell 17% to GBP1.45 billion from GBP1.75 billion a year before, and pretax profit fell 93% to GBP15 million from GBP222 million.
Advertising revenue fell 21%, while ITV Studios revenue was down 17%.
ITV said it has decided not to pay an interim dividend in light of continued economic uncertainty.
Looking ahead, ITV said that given the level of uncertainty for both ITV Studios and the Broadcast unit it is not possible to provide financial guidance for the third quarter or the remainder of the year.
"While our two main sources of revenue - production and advertising - were down significantly in the first half of the year and the outlook remains uncertain, today we are seeing an upward trajectory with productions restarting and advertisers returning to take advantage of our highly effective mass reach and addressable advertising platform, in a brand safe environment," said Chief Executive Carolyn McCall.
"The future is still uncertain due to the pandemic but the action we have taken to manage and mitigate the impact of Covid-19 puts us in a good position to continue to invest in our strategy of transforming ITV into a digitally-led media and entertainment company," McCall added.
The stock was down 4.1% early Thursday.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 1.2% at 6,032.00
Hang Seng: down 1.1% at 24,839.87
Nikkei 225: closed down 0.4% at 22,418.15
DJIA: closed up 373.05 points, or 1.4%, at 27,201.52
S&P 500: closed up 0.6% at 3,327.77
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GBP: up at USD1.3171 (USD1.3144)
EUR: soft at USD1.1892 (USD1.1901)
Gold: up at USD2,052.25 per ounce (USD2,046.16)
Oil (Brent): soft at USD45.50 a barrel (USD45.96)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Thursday's Key Economic Events still to come
0930 BST UK CIPS-Markit construction purchasing managers' index
1100 BST Ireland industrial production and turnover
0730 EDT US Challenger job-cut report
0830 EDT US initial jobless claims
1030 EDT US EIA weekly natural gas storage report
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Bank of England said its policymakers unanimously voted to keep monetary policy unchanged in light of the challenges posed by the coronavirus pandemic. The BoE's nine-member Monetary Policy Committee all voted to keep the UK Bank Rate at 0.1% and asset purchases at GBP745 billion, as widely expected. The central bank noted global activity has strengthened over recent months, but generally remains below its level in late 2019. Covid-19 has continued to spread rapidly within a number of emerging market economies, however, and there has been a renewed rise in cases in many advanced economies, the bank highlighted. "The outlook for the UK and global economies remains unusually uncertain," the BoE said.
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Ireland's service economy registered growth in July, the first month of expansion since February, before lockdown measures gripped the country. The business activity index posted 51.9 in July, above the 50.0 no-change mark and towering over the 39.7 from June. June was the fourth month on the bounce that the print came in below 50.0. "That said, the rate of growth signalled was modest, and below the pre-crisis trend. Discounting the four-month downturn from March to June, July's Index reading was the second-lowest since August 2012. It was also well below the long-run survey average of 55.0 since May 2000," IHS Markit cautioned.
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The White House is setting a Friday deadline to reach a deal with Congress on the next phase of the US economic stimulus, and threatening to otherwise take unclear executive action. "By Friday, if we haven't made significant progress and we are much too far apart, the president is prepared to take executive action," Chief of Staff Mark Meadows said in an interview on CNN. Legally, President Donald Trump is constrained from acting unilaterally on stimulus measures without funds from Congress. Meadows blamed Democrats for not compromising on their USD3 trillion proposal, but did say Republicans are starting to make concessions.
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BROKER RATING CHANGES
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LIBERUM CUTS PAGEGROUP TO 'HOLD' ('BUY') - TARGET 375 (460) PENCE
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JEFFERIES RAISES AGGREKO PRICE TARGET TO 720 (600) PENCE - 'BUY'
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COMPANIES - FTSE 100
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Glencore scrapped its dividend as the Swiss-based miner and commodities trader posted a drop in interim earnings. For the half-year ended June 30, Glencore swung to a net loss of USD2.60 million from a USD226 million profit last year, as revenue fell to USD70.96 billion from USD107.43 billion. Glencore also reported a 13% drop first-half adjusted earnings before interest, tax, depreciation and amortisation to USD4.83 billion. In addition, Glencore said it will not pay its deferred dividend, saying the economic outlook is too uncertain due to the coronavirus. The dividend was put on hold earlier this year due to the pandemic. CEO Ivan Glasenberg said: "The outlook remains uncertain in the short-term. Notwithstanding our cash-generative business and secure liquidity positions, the board has concluded that it would be inappropriate to make a distribution to shareholders in 2020, instead prioritising the acceleration of net debt reduction to within our target range, currently expected to occur by the end of 2020."
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GlaxoSmithKline said the US Food & Drug Administration has approved Blenrep as a monotherapy treatment for adult patients with relapsed or refractory multiple myeloma. Blenprep will be used for adult patients, who have received at least four prior therapies including an anti-CD38 monoclonal antibody, a proteasome inhibitor and an immunomodulatory agent, the drugmaker said. "Blenrep is the first approved anti-BCMA therapy and has the potential to transform the treatment of patients with relapsed or refractory myeloma who have limited treatment options today," said Hal Barron, chief scientific officer & president of Research & Development at GSK.
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COMPANIES - GLOBAL
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Germany's Siemens reported a deterioration in its financial results for the third quarter of financial 2020, as it said it expects the pandemic to continue to hurt its business through its fourth quarter as well. Siemens said that net income was EUR535 million in the three months ended June 30, down 53% year-on-year from EUR1.13 billion. Revenue fell 5% to EUR13.49 billion from EUR14.24 billion. Order intake dropped 7% to EUR14.4 billion primarily due to declines in its Siemens Healthineers and Smart Infrastructure business
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AXA said first half earnings were resilient in the face of the Covid-19 pandemic, and the company remains well positioned for a prolonged period of low interest rates. The Paris-based insurer reported a 39% drop in net income for the six months to June 30 to EUR1.43 billion from EUR2.33 billion a year ago. Revenue fell 2% to EUR52.4 billion. First half adjusted earnings - the company's preferred profit measure - were down 48% to EUR1.98 billion. Excluding Covid-19 claims of EUR1.5 billion and the disposal of Equitable Holdings, underlying earnings were up 1% annually. "The impact of Covid-19 on AXA’s earnings was in line with our previously published guidance. commercial lines were the most impacted, notably at AXA XL. The rest of the group was resilient, with the impacts from Covid-19 claims largely offset by lower frequency in motor and growth in health and asset management," said Chief Executive Officer Thomas Buberl.
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Thursday's Shareholder Meetings
Echo Energy
Dekel Agri-Vision
De La Rue
Investec
Naked Wines
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By Tom Waite; thomaslwaite@alliancenews.com
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