ITV, the UK commercial free to air TV broadcaster has confirmed that it will drop its final dividend for2020 after revenue slumped sharply in the six months to June, sending pre-tax earnings down more than 90%.
ITV said its pre-tax profits plunged 92% to just £15 million compared to £190 million a year ago.
That means shareholders will not get a dividend for at least 18 months with the final for 2019 omitted in March and the final for 2020 not to be paid.
ITV has omitted any guidance for the rest of the year and beyond, even though the rate of fall in ad revenues slowed to a drop of 23%in July after a 43% slump in the second quarter — the worst decline for any period in ITV’s 65-year history.
It said the dividend will be restored “as soon as circumstances permit” which could be years away.
And even though the UK is a very different TV market to Australia’s the steep falls in revenue seen in the ITV results will be repeated by Australian TV (and print) companies in the next few weeks as Nine Entertainment, Seven West Media, Southern Cross Austereo, and News Corp/Foxtel (today) report.
Free TV Australia yesterday reported that TV advertising revenue for the first six months of 2020 was slumped 21% to $A1.49 billion year on year.
For the 2019-20 financial year, TV ad revenue fell 13.7% to $A3.4 billion. The figures include metropolitan free-to-air, subscription TV, and broadcast video on demand (BVOD). The figures exclude SBS.
Commercial free-to-air networks, revenue was $A1.01 billion for the six months to June 2020, down 21.9%, and $A2.33 billion for the year, down 14.1%.
ITV’s total group revenue in the first six months of the year dropped 17% to £1.45 billion ($A2.66 million), down 17% from £1.74 billion over the same period last year.
ITV Studios’ revenue was also down 17% (£295 million) to £630 million ($A1.1 billion), while advertising revenue fell 21% to £671 million ($A1.2 billion).
ITV CEO Carolyn McCall said the first half of the year was “one of the most challenging times in the history of ITV. I am really proud of the way that our colleagues have responded to the Covid-19 pandemic and helped demonstrate the enduring value of ITV.”
McCall though was upbeat tone about the rest of the year, saying “advertisers are returning,” with July being down 23% as car companies and retailers begin spending more money.
ITV Studios has also restarted production 70% of the 230 shows it was forced to halt during the height of the pandemic. These include Coronation Street.
ITV says its well on target to achieve promised 2020 savings with £51 million of the promised £60 million already achieved. These savings have included extending 20% salary reductions for senior staff from the end of June to the end of October and top executives going without their 2020 bonuses.
As of last month, ITV had 1,500 staff on unpaid leave. This has now fallen to 300 and continued to fall as programs return to production.