ITV sees fall in revenues as it grapples with 'uncertain' economic environment

Broadcasting giant ITV endured a fall in revenues at the start of the year and expects the TV advertising market to remain tough as it grapples with an "uncertain" economic environment.

The group, home to shows such as Britain's Got Talent, Broadchurch and The Voice, saw net advertising revenue drop 9% to £393 million in the first quarter, but said predictions for the full-year were unchanged.

Revenues also slipped 3% to £731 million over the period, as it braces itself for a rough ride in the coming months, with advertising income expected to drop by between 15% and 20% in June after last year's performance was boosted by the European Championships.

However, efforts to shift revenue streams away from the turbulent advertising market continue to bear fruit, with its ITV Studios production arm bolstering revenues by 7% to £343 million in the three months to the end of March this year.

The update comes as ITV remains on the hunt for a new top boss to replace outgoing chief executive Adam Crozier, who will leave the company on June 30.

Mr Crozier said: "ITV's overall performance and the shape of the UK advertising market are very much as we anticipated and our guidance for the full year remains unchanged.

"Over the first half we expect ITV Family NAR to be down 8% to 9%. In line with previous guidance April was up 5%, while we expect May to be down 8% and June to be down 15% to 20% against the tough comparator of the Euros last year.

"The first half performance will also be impacted by the weighting of the programme budget to the first six months and the phasing of Studios deliveries, most significantly the non-recurring benefit of The Voice of China in 2016.

"While the economic environment remains uncertain our guidance over the full year remains unchanged."

The chief executive's departure is part of a shake-up at ITV that will see chairman Sir Peter Bazalgette take on the role of executive chairman, while Ian Griffiths will become the combined chief operating officer and group finance director.

ITV said a long-term successor to the chief executive would be disclosed ''in due course''.

Updating on its first quarter performance, the broadcaster said its online, pay and interactive arm jumped 12% thanks to a 22% rise from online advertising.

George Salmon, equity analyst at Hargreaves Lansdown, said: "Advertising makes up a sizeable chunk of ITV's top line and the clouds hanging over the economy mean ad budgets are being cut, which is weighing on the shares.

"However, if it were not for outgoing CEO Adam Crozier, one can't help but feel that the near 10% decline in the share price since Brexit would have been much worse.

"He has been instrumental in the transformation of ITV into a much more diverse and resilient business, with the growth of ITV's production houses meaning the group is nowhere near as dependent on volatile advertising budgets as it once was."