ITV (LON:ITV) has reported a tough start to 2017, with revenue for the first quarter falling by three percent.
The broadcaster warned investors that they would have a difficult start to the year due to the nine percent fall in advertising revenue – down to £393 million.
“While the economic environment remains uncertain our guidance over the full year remains unchanged,” said outgoing chief executive Adam Crozier in his last trading update before standing down.
“We expect to grow our share of broadcast and will continue to deliver good growth in Online, Pay & Interactive driven by strong demand for online advertising.”
Equity Analyst at Hargreaves Lansdown George Salmon said: “Advertising makes up a sizeable chunk of ITV’s top line and the clouds hanging over the economy mean ad budgets are being cut, which is weighing on the shares.
“However, if it were not for … Adam Crozier, one can’t help but feel that the near 10% decline in the share price since Brexit would have been much worse.”
ITV have warned that advertising revenues could continue to fall and be as low as 15 – 20 percent in June due to the absence of an international football tournament.
Online advertising continues to grow the broadcaster have said. They were up 22 percent in the first three months of 2017.
“The growth in on-demand services means the challenge for [Mr Crozier’s] successor will be to mould ITV into a more interactive organisation to compete with Amazon (NASDAQ:AMZN) and Netflix (NASDAQ:NFLX).” said Geroge Salmon from Hargreaves Lansdown (LON:HL).
ITV have said that the full year profits for the whole group are still in line with its forecasts.
In February the broadcaster bought control of French production group Tetra. In April the group bought 45 percent of Blumhouse Television, makers of Cold Case Files. Last week they said they acquired a majority stake in World Productions, the company behind Line of Duty.