ITV: COMPANY AND SHARES REPORT

Overview: ITV plc is a British media company based in London, England. It holds 13 of the 15 regional television licenses that make up the ITV network, the oldest and largest commercial terrestrial television network in the United Kingdom.  Prev. Close: 143.3  Day's Range: 143 - 144.1  Revenue: 3.09B  Open: 144  52 wk Range: 102.65 - 147.6  EPS: 0.11  Volume: 8,909,070  Market Cap: 5.76B  Dividend (Yield) 8.00 (5.58%)  Average Volume (3m): 12,469,411  P/E Ratio: 12.91  Beta: 1.07  1-Year Change: 8.87%  Shares Outstanding: 4,025,409,194  Next Earnings Date: Feb 26, 2020 (Source: uk.investing.com) ITV studios are a diversified business capitalising from some of their competitor’s successes by producing shows such as the BBC's Bodyguard, Channel 4's Come Dine With Me and Netflix Showpiercer to name a few. ITV Studios lies behind many of the most popular programmes on television today, in the UK and abroad.   Company outlook: ITV are confident they will deliver £20m of cost savings and continue to execute well on their strategy, building on their market leadership in linear TV and in premium AVOD. They feel positive they will deliver double digit online revenue growth, at least 5% revenue growth at a 14% to 16% margin. They have stated they will maintain a robust balance sheet delivering on their full year dividend commitment of at least 8.0p per share. Economic and political uncertainty has continued to impact the demand for advertising as they expected, with total advertising forecast to be in a range of -1% to +1% in Q3. However, ITV remain focused on delivering in the areas of the business which are under their control whilst actively mitigating the impact of exogenous factors. (Source: itvplc.com) Below are figures which ITV have presented regarding their performance and progress. H1 modestly better than expected • Total external revenue down 7% at £1,476 million (2018: £1,593 million) • ITV total advertising revenue down 5%, better than previously guided • Strong growth in online revenue, up 18%, against tough comparatives • Total ITV Studios revenue down 6% at £758 million (2018: £803 million) as expected, with deliveries weighted to the second half. ITV Studios external revenue was down 11% at £487 million (2018: £549 million) • Broadcast & Online adjusted EBITA was down 18% at £211 million (2018: £257 million) • ITV Studios adjusted EBITA down 2% at £116 million (2018: £118 million) • Adjusted EBITA down 13% at £327 million (2018: £375 million) • Adjusted EPS down 13% at 6.2p (2018: 7.1p) • Statutory EBITA down 16% at £310 million (2018: £367 million) • Statutory EPS down 9% at 4.8p (2018: 5.3p) Strong performance in areas we can control • Good on-screen and online viewing • ITV Family SOV flat against tough comparatives and ITV2 16-34 SOV up 7% • 99% of all commercial audiences over 5m delivered by IT • Online viewing up 13%, with monthly active users (MAU) up 37% • ITV Studios has a strong pipeline of new and returning shows Over 500,000 Hub+ subscribers and over 650,000 BritBox US subscribers   Continue to successfully execute our strategy • Britbox is due to launch in the UK in Q4, following formal agreement with the BBC • We will begin the roll out of our new programmatic addressable advertising platform for the ITV Hub in Q4 • Identified a further £5m of cost savings in 2019 and £15m over 2020 to 2022, in addition to £35m to £40m announced previously • Strengthened our capabilities in advertising, data and technology Solid balance sheet and healthy liquidity • Strong profit to cash conversion of 89% on a 12-month rolling basis • 1.3x reported net debt to adjusted EBITDA on a 12-month rolling basis Interim dividend of 2.6p, in line with our stated policy (Source: itvplc.com) Taking all of this into consideration ITV are looking like they are going from strength to strength. When you take into account the low P/E ratio and generous dividend yield, the stock appears to have good prospects for delivering high investment returns. However, there is always the risk that the company doesn’t meet its targets and faces challenges from online competition.  

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