ITV plc (LON:ITV) (ITV.L) has released a trading statement today for the first nine months of the year. It is largely as per expectations, and shows that the company is delivering on its strategy in my view.
External revenue increased by 6%, with the company recording growth across all parts of the business. Studios revenue increased by 10%, with organic revenue up 7%. Total advertising revenue increased by 2%, with online advertising recording a rise of 43%.
Total viewing across the company’s offering increased by 5%, with it being driven by a 4% increase in total minutes viewed and a 37% rise in time spent viewing online. The company expects to deliver good growth in its Studios business, with it having a strong pipeline of new programmes that are set to be delivered over the coming months.
ITV’s online advertising continues to experience double-digit growth, although total advertising is due to be down by 3% in the fourth quarter and flat for the year as a result of the increasingly uncertain macroeconomic environment.
The business continues to deliver on the investment and cost savings programmes which were outlined in July. As a result, it is on track to deliver financial performance for the full year which is in line with previous guidance.
In my view, ITV is performing relatively well in what is a tough operating environment. It has been able to deliver revenue growth, with its Studios division performing well and online advertising providing a catalyst which I feel could continue over the medium term.
With cost savings and a refreshed strategy having the potential to boost its financial performance, I’m relatively optimistic about its long-term prospects. Although its share price may be volatile in the near term as a result of macroeconomic uncertainty, I believe that a P/E ratio of around 11 suggests that the stock could offer good value for money relative to its industry peers.