ITV blames Brexit as it warns over further falls in advertising revenues
Broadcasting giant ITV has blamed Brexit vote uncertainty for a drop in full-year advertising revenues and warned over further falls as ad spend remains under pressure.
The group, home to shows such as The X Factor, said net advertising revenues dropped 3% to £1.67 billion amid "political and economic uncertainty" and cautioned it expects declines to worsen to around 15% this month.
It held profits largely firm at £847 million in 2016 up slightly from the £843 million reported for 2015, despite the ad sales woes.
ITV said net advertising revenues are set to be down by around 6% overall for the first four months of 2017 because of ongoing "economic uncertainty" as the UK prepares for Brexit negotiations.
Advertising sales fell around 5% in January, 7% in February and are expected to plunge by 15% in March before recovering in April, with ITV forecasting a 5% recovery.
Chief executive Adam Crozier said the group performed better than a depressed wider television advertising market and would outperform again in 2017 as a whole.
He said: "ITV delivered a good performance in 2016 as we continue our strategy of rebalancing and strengthening the business creatively, commercially and financially.
"The continued growth in revenue and adjusted profit, despite a 3% decline in spot advertising revenues resulting from wider political and economic uncertainty, is clear evidence that our strategy is working and remains the right one for ITV."
Results showed that on a bottom-line basis, pre-tax profits fell 14% to £553 million, due largely to costs of closing its final salary pension scheme and a previously announcing restructuring effort to deliver annual savings of £25 million.