The Times Today17 Oct 2022 08:30
ITV mulls options for Studios division
Bosses at ITV are seeking to cast its production business in a more prominent light amid frustrations with the group’s stock market valuation.
The broadcaster is reviewing the future of ITV Studios, the group’s production arm, including the option of selling a stake, in an attempt to boost its lagging share price.
Britain’s biggest free-to-air commercial broadcaster has recently received expressions of interest in ITV Studios, with the Financial Times reporting that potential buyers include private equity groups and large independent producers such as Bertelsmann’s Fremantle or FL Entertainment, the parent company of Banijay.
ITV said that its board “continuously reviews opportunities to increase shareholder value. However, we don’t comment on speculation.”
Dame Carolyn McCall, chief executive of ITV and a former boss of easyJet, spoke this summer about a lack of recognition for the value of the broadcaster’s studios business, whose production companies are behind hundreds of programmes from Coronation Street and This Morning to Love Island and I’m a Celebrity.
Shares in ITV are down more than 44 per cent this year to 61¾p and some City analysts value the production arm at more than the group’s £2.5 billion market value.
Analysts at Citi have said that ITV Studios could be worth roughly £3 billion and Credit Suisse this summer suggested a value of 66p to 82p per share for the arm, which it said meant the share price was “discounting a negative value for the broadcast and online business”.
ITV has been expanding the production business through acquisitions, including buying a 79.5 per cent stake in Plimsoll Productions — the maker of natural history programmes such as Hostile Planet for Disney and Night on Earth for Netflix — in June for £103.5 million.
The studios business posted revenue of ÂŁ927 million in the first half of the year, up 16 per cent, compared with group sales of almost ÂŁ2 billion, up 9 per cent.
ITV is launching ITVX, a new free ad-funded platform, and is targeting at least £750 million of digital revenues by 2026. The cost of ITVX — which will replace ITV Hub and ITV Hub+, its existing domestic online services — unsettled investors when ITV revealed the plans in March.
The company is anticipating increased advertising spending in the fourth quarter from the men’s football World Cup, despite the weakening economy. Total advertising revenue, a closely tracked industry performance measure, rose 5 per cent to £910 million during the first half of the year.
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