ITV has revealed the scale of the impact of coronavirus as advertising slumped 42% in April, forcing the broadcaster to take measures including furloughing 800 staff.
The slump, prompted by advertisers holding back or pulling campaigns during the lockdown, is less than the 50%-plus decline that City analysts feared. In early March, ITV optimistically predicted a 10% fall in ad revenues for April.
Still, the better-than-expected figures delivered on Wednesday gave rise to a more than 5% increase in ITV’s share price in early trading.
ITV’s trading update reveals how rapidly the advertising crash hit. The broadcaster reported an 8% year-on-year increase in advertising income in February, before the spread of coronavirus had a major impact on the UK economy. In March, advertising revenues flatlined year on year as businesses shut and lockdown measures were introduced.
ITV, whose share price slumped to the lowest point in more than a decade, said the uncertainty in the market means it will not be providing further guidance on advertising income.
The broadcaster said it had furloughed about 15% of its UK workforce, mostly at ITV Studios, which makes shows including Coronation Street and Emmerdale, after TV and film production was shut down nationwide in mid-March.
“ITV has taken swift and decisive action to manage and mitigate the impact of Covid-19 by focusing on our people and their safety, and by continuing to reduce costs and tightly manage our cashflow and liquidity. We are also ensuring that we continue to inform and entertain our viewers and stay close to our advertisers.”
The broadcaster said it would reduce overhead costs by £60m this year, an increase in its previously announced £30m, and has withdrawn its final dividend for 2019.
The broadcaster has also reached an agreement with its pension trustees and tax authorities to delay at least £150m of payments due by June, to the second half and into 2021.
ITV, which earlier this week announced its flagship summer programme Love Island will be cancelled this year, said it was working on a “phased approach to office re-entry” and a “return to production protocol” to restart programme production.
ITV said total viewing hours were up 2% in the year to the end of March, while viewing of shows on the streaming service ITV Hub was up 75% year on year, to 169m hours.