Earnings: Boylemania Pushes ITV.com To 100 Percent Sales Increase


Despite being stagnant in Q1, ITV’s online sales are now going back up again. The under-fire broadcaster made £18 million in online revenue in the first six months of 2009, a six percent annual rise. The online rise is more impressive given the loss of revenue from ITV (LSE: ITV) Local, after its closure as a standalone business, and the inevitable decline from Friends after the site abandoned its paywall in favour of an ad-supported, free model.

Update: In ITV’s analyst call, group finance director Ian Griffiths said Friends and the two other businesses marked for sale — SDN and Scoot — made a combined EBITDA of £17 million in the half, which is flat on H108. Taken together, Friends and Scoot made a combined £8 million, down from £12 million a year ago, while SDN saw a 31 percent revenue increase to £21 million. No mention of ITV Local, which suggests its impact on the balance sheet is minimal.

ITV may have failed (or refused) to reach a commercial agreement with YouTube to monetise Britain’s Got Talent clips, but on its own site…

Boylemania still helped ITV.com ad sales increase 100 percent to £10 million
— ITV.com attracted 116 million views compared to 31 million in H108 — the average of 19 million views a month is a 250 percent increase
— 50 million views were added in May alone, when unique users peaked at 12.8 million.
— Average monthly unique users during the half was 8.7 million, a 46 percent year on year increase

Release | Half-year report | Webcast 9.30 BST

H109 earnings: But overall ITV made a £105 million loss in H109. That sounds bad, but in the first half of 2008 it made a loss more than 14 times higher at £1.53 million — so outgoing CEO Michael Grade’s plans to shrink the company, make big savings and sell off online assets seems to be going to plan. H109 revenue dropped from £1.03 billion last year to £909 million. No update on the hunt for a new CEO — the company simply says the search continues. Friends Reunited has gone and Grade says “good progress” is being made selling Freeview channel operator SDN.

TV revs down ITV pleads that H109 saw that worst “year-on-year decline on record” for TV ads — revenue across the industry is down by 17 percent or £277 million — so its drop of 15 percent or £108 million does outperform the market. The outlook here is good, or optimistic: ITV’s TV revenue decline for Q3 is only expected to be 12 percent.

Savings: The financial benefit of those 1,600 job cuts are now being felt: the company says it’s on course to make £155 million this year, rising to £215 million in 2010 and £285 million by 2011. Headcount was 5,500 in 2007 but now stands at 4,500 including casuals and 3,500 full-time. Another 250 jobs are going to go this year as part of the same programme.

Kangaroo: The slides reveal that the company took a new £2 million hit on Project Kangaroo in the half — despite selling its assets to broadcast transmission company Arqiva.

Analyst’s take:BDO Stoy Hayward’s head of media Andy Viner says these are “respectable” results, but he warns that ITV remains a “fairly traditional” business in a changing digital world and the “results are short on how it will explore this changing landscape.” He says the company desperately needs some new blood to “exploit growth opportunities from different platforms using new media,” including perhaps PPV online VOD.

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