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ITV (ITV) 172.2p
Loss to date: 11.5%
Original entry point:
Buy at 194.6p, 22 December 2016
Our view that an advertising slowdown was already priced-in at free-to-air broadcaster ITV (ITV) proved too hopeful. But with a new chief executive appointed and a difficult first half out of the way there could be scope for the shares to do rather better in the remainder of the year. For these reasons we hold to our positive view.
Results for the six months to 30 June were announced on 23 July. Although earnings were down 9% this was actually a little better than feared and the year-on-year decline in advertising revenues due to political and economic uncertainty in the UK came in at 8% against guidance of between 8% and 9%.
Liberum reckons non TV-advertising revenue now accounts for 45% of the group total. ITV has invested in its production and online arms. The decline in TV ad revenue is expected to moderate in the third quarter at 5%. EasyJet (EZJ) boss Carolyn McCall will take the helm at ITV on 8 January 2018.
If we liked ITV at nearly 200p it follows we should be even more positive at the current levels. With the outlook brightening we see scope for the shares to recover in what remains of 2017.
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