Improved advertising figures please investors

Oct 14 2009 by Iain Laing, The Journal

BELEAGUERED broadcaster ITV has cheered investors after better-than-expected advertising figures gave the broadcaster some relief from its ongoing leadership crisis.

The group said sales for the ITV family of terrestrial and digital channels were expected to be down by 3% in October, with a similar figure likely next month.

Numis Securities said the outcome for two of the biggest months in the advertising year was much better than its predicted 10% fall and meant it would add £20m to its profits forecast for this year.

ITV shares rose 8% at one stage yesterday as investors welcomed the good news from the broadcaster, which has been frustrated in attempts to fill the roles of chairman and chief executive.

The saga took a new twist yesterday when ITV revealed two potential candidates, Sir Michael Bishop and Sir Crispin Davis, were not in the running for the job of chairman, currently held on an executive basis by Michael Grade.

Chief operating officer John Cresswell has also agreed to become ITV’s interim chief executive, but in another blow will leave “to seek a fresh challenge” when a permanent chief executive is appointed.

Despite the succession problems, Mr Cresswell gave investors some reassurance that key decisions were still being taken today as he unveiled details of plans to shore up ITV’s balance sheet and pension fund deficit.

ITV completed a £135m bond issue, while it will no longer dispose of Freeview channel operator SDN, which it put up for sale earlier this year.

The business, which generates revenues of more than £40m a year by renting capacity to channels including Five and QVC, will be kept so it can be used as asset backing on the ITV pension scheme.

Mr Cresswell said: “Seeking to deploy SDN as asset backing to the pension scheme will help us manage our pension risk, whilst continuing to benefit from the strong cashflows that business delivers.”