ITV posts 6% growth in Q1 revenue

ITV has posted a 6% year-on-year increase in revenue for the first quarter of 2010, but the commercial broadcaster warned that the market outlook remains "highly uncertain".

In the three months to the end of March, ITV's group revenues grew to £450 million from £425m in the same period last year.

The growth was largely down to an improvement in the UK advertising market, which rose 8% year-on-year in the first quarter, beating ITV's own 7% forecast.

ITV expects to see television ad revenues up by as much as 22% during the second quarter of 2010 as the World Cup provides a much need uplift.

In March, ITV said that early forecasts for April and May indicated that growth could even be as high as 25% to 30%. However, the figures are being compared against very weak results in 2009.

ITV's broadcasting and online revenue in Q1 was up 6% to £390m, but ITV1's share of commercial impacts for the 12 months to April 26 was down 5%. The figure for ITV's entire portfolio of channels was described as "flat".

The company's production arm ITV Studios reported a 7% rise in international revenue to £60m, but its internal domestic production revenue fell from £75m in Q1 2009 to £73m.

ITV will hope for an improvement in performance at ITV Studios following the appointment of former Channel 4 director of television Kevin Lygo to lead the division.

At stock market trading this morning, ITV's shares were down 3p, or 5.3%, at 58p, which values the company at £2.27 billion.

ITV, which is currently undertaking a strategic review of its entire operation, said that it is committed to "incremental investment in programming and online over the second half to provide a stronger platform into 2011".

Adam Crozier, who began his tenure as ITV chief executive just under two weeks ago, said that growth in the TV ad market helped the firm post strong revenue results.

However, he cautioned that the outlook for the rest of 2010 and into 2011 remains "uncertain", especially when factoring in the aftermath of the general election.

"ITV's financial performance over the first quarter reflects growth in UK television advertising, following last year's record declines," said Crozier.

"Over two years, revenues are still tracking below 2008 levels. The outlook for the latter part of 2010 and early 2011 is tough with more testing year-on-year comparators and uncertain market conditions post-election.

"Given also the long-term challenges facing the free-to-air market, change remains an imperative at ITV and we are focused on driving the transformation of the business over the next three to five years."

According to analysts at Citi, the likely prospect of a hung parliament - in which no political party holds an outright majority - would be "less favourable" for ITV compared to a Conservative majority, reports The Wall Street Journal.

Citi said that even if the Tories do get into power then the regulatory changes that they have pledged "either won't come at all or will be pushed down the agenda".