Deep Diving Into ITV Plc’s Share Price Performance

  • Nov 21, 2019 GMT
  • Team Kalkine
Deep Diving Into ITV Plc’s Share Price Performance

ITV Plc

ITV Plc (ITV) is a London, the United Kingdom headquartered media company that operates as an integrated producer broadcaster (IPB). The company is engaged mainly in the business of creating and producing original content in the form of feature television shows which are featured on various platforms across the spectrum of the company’s medium like television and digital streaming platforms. The company’s flagship broadcast channel is the ITV, while its other channels are ITV2, ITV3, and ITV4 as well as CITV and ITVBe. The company also provides a high definition (HD) service for all these channels. The company’s content from its channels also gets featured on various frontrunning digital streaming platforms such as Netflix, Amazon Prime as well as the recently launched Apple TV Plus. The company’s own Direct to Consumer service is called the ITV Hub Plus, which it operates through two of its flagship brands called BritBox, which s operated in a partnership with the British Broadcasting Company (BBC) and Cirkus. Geographically, the company has various divisions such as ITV Studios UK, ITV America, ITV Studios Rest of the world and also includes a Global Entertainment network division.

ITV Financial Performance

On 24th July 2019, the company announced its interim results for the period ended 30th June 2019 in comparison with the same period in the previous year. The major highlights of the results were the decline in total revenue by around 5 per cent year on year from £1.749 billion in the first half of 2018 to £1.848 billion in H1 2019. This was significantly driven by a 6 per cent year on year reduction in the non- advertising revenue  from £958 million in H1 2018 to £900 million in H1 2019. The impact was also due to the Advertising revenue for the company which fell by around 5 per cent to £849 million in H1 2019 from £890 million in H1 2018. Even though the total advertising revenue was down by 5 per cent, the resultant H1 2019 revenue was better than the previous guidance made by the board. The company also reported that the online revenues increased strongly by around 18 per cent despite difficult situations, with the flagship show of the company, Love Island, which performed well of late. This became a part of the better than expected total advertising revenue. The company also reported that the total ITV Studios revenue declined by around 6 per cent year on year at £758 million in H1 2019 as compared to £803 million in H1 2018, on expected lines, driven primarily by deliveries scheduled for the second half of the year. ITV Studios external revenue also reduced by 11 per cent year on year to £487 million in the first half of the year, in comparison with the H1 2018 ITV Studios external revenue valued at £549 million. The company highlighted in the press release that there was a good on-screen and online viewing with ITV Family SOV flatlined as compared to the previous year and ITV2 16-34 SOV was up by approximately 7 per cent year on year. The company reported that 99 per cent of all commercial audiences over 5 million delivered by ITV. The company also highlighted that the online viewing increased by 13 per cent, with monthly active users on its digital streaming platform increasing by 37 per cent year on year during the reported period. The company reported a year on year decline of approximately 13 per cent in the Group Adjusted Earnings before interest taxes and amortization (EBITA) from £375 million in the first half of 2018 to £327 million in the first half of 2019. The group adjusted EBITA margin was also reported to have declined from 24 per cent in H1 2018 to 22 per cent in H1 2019. In the midst of this, the company reported a 13 per cent year on year decline in the adjusted Earnings per share (EPS) from GBX 7.1 per share in H1 2018 to GBX 6.2 per share in H1 2019. There was also a 9 per cent year on year decline reported in the Statutory Earnings per share, which were reported at GBX 4.8 per share during the reporting period. Post this performance, the management proposed an interim dividend of GBX 2.6 per share, displaying absolutely no change in comparison with the interim dividend declared by the board in H1 2018. The net debt position of the company as on 30th June 2019  was at £1.082 billion.

 

Six months to 30th June 2019 2019 2018 Change Change
£ m £ m £ m
Total advertising revenue 849 890 -41 -5 %
Total non-advertising revenue 900 958 -58 -6 %
Total revenue 1,749 1,848 -99 -5 %
Internal supply -273 -255 -18 -7 %
Group external revenue 1,476 1,593 -117 -7 %
         
Group adjusted EBITA 327 375 -48 -13 %
Group adjusted EBITA margin 22 % 24 %    
Statutory EBITA 310 367 -57 -16 %
         
Adjusted EPS 6.2 p 7.1 p (0.9) p -13 %
Statutory EPS 4.8 p 5.3 p (0.5 )p -9 %
Dividend per share 2.6 p  2.6 p    
Net debt as at 30th June 2019 -1,082 -1,034 -48  

Source: Company Website

ITV Trading Statement

On 12th November 2019, the company presented a Trading statement for the nine months, and the third quarter ended 30th September 2019. It was reported that the company's performance for the nine months ended 30th September 2019 was in line with management’s expectations, despite facing a tough economic as well political environment surrounded by the clouds of Brexit. The company also reported making good progress in the execution of their strategies of improving the content on the digital media platforms. The company has launched BritBox successfully and the management is encouraged by the robust reviews for the service till now. The company also reported having entered distribution and marketing deal with the BT group and EE and in a content association with Channel 4 in the United Kingdom.

ITV Latest News

The company’s share price, in the last few days, have been on a northbound journey, despite the shares being oversold in the medium term, due to the fears of Brexit. The upswing primarily can be said to be driven by the Networks’ current flagship programme, Love Island’s popularity. Love Island has been a success for ITV, and the unscripted TV drama has produced a created a universal franchise. ITV reports it was the most-watched show on any digital direct medium in 2018 with the best performing arrangement yet with a general viewing of around of 4.0 million watchers and a market share of around 17 per cent. ITV shares had corrected steeply since the Brexit referendum for some though; there is potential for relative improvement in cyclical advertising revenues for the broadcasting business as Brexit uncertainty fades.

ITV Share Price Performance

Daily Chart as at 21-November-19, before the market close (Source: Thomson Reuters)

On 21st November 2019, at 08:30 A.M GMT, While writing, ITV Plc’s share price has been reported to be trading at GBX 136.10 per share, a decrease of 0.58 per cent or GBX 0.80 per share as compared to the previous day’s closing price, which was reported to be at GBX 136.90 per share. While writing, the ITV Plc share was reported to have been trading 32.59 per cent above the 52-week low share price, which was at GBX 102.65 per share, that the company’s shares reached on June 26, 2019. This was also 11.97 per cent below the 52-week high price at GBX 154.60 per share, which the company’s share achieved on November 28, 2018. ITV Plc’s reported market capitalisation (M-Cap) stands at a value of GBP 5.494 billion.

By the time of writing, 5.03 million of the company’s shares had been traded in the market. The company’s share has given a negative return of 9.33 per cent in value in the last one year, from the price of GBX 150.10 per share as of November 21, 2018. The ITV Plc share has given a positive return in the last six months of around 21.84 per cent from the share price of GBX 111.70 per share on May 21, 2019. ITV Plc’s share has reportedly lost 1.73 per cent in value in the last one month from the price of GBX 138.50 per share that the shares to have closed on October 21, 2019.

The beta of the ITV Plc’s share was reported to be at 1.0376. This means that the company’s share price movement is almost as volatile in its trend, as compared to the benchmark market index’s movement.

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