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Double-digit growth for ITV Studios saves the day

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ITV Studios’ double-digit growth has driven ITV’s 6 per cent increase in total revenue for nine months ended September, the company announced. 
ITV Studios’ double-digit growth has driven ITV’s 6 per cent increase in total revenue for nine months ended September, the company announced. (Photo by Stuart C. Wilson/Getty Images)

ITV appeared to survive its own bush tucker trial this quarter, with its studios arm saving the day with double-digit growth.

I’m a Celebrity maker delivered a 16 per cent boost in revenue to £1.4bn, as ITV Studios continues to grow ahead of the market with a roster of big-hitters, like Love Island.

Although total ad revenue fell two per cent compared to 2021, sending ITV shares tumbling this afternoon, this was largely expected, especially compared to the Euros summer last year.

Nonetheless, Hargreaves Lansdown equity analyst Sophie Lund-Yates said that mega-hits are still too few and far between for ITV, exposing the broadcaster to future losses.

Chief executive Carolyn McCall said although the firm remains “mindful” of the macroeconomic and geopolitical uncertainty, she backed the operational momentum across both studios and media and entertainment divisions.

The firm is due to launch its new streaming service ITVX next month, which will introduce a paid ad-free subscription offering.

Lund-Yates said the move was “admirable”, but warned “there simply may not be enough spare eyeballs to go around.”

Total revenues rose by six per cent to £2.52bn, with digital advertising revenue up a solid 13 per cent for nine months ended September.

The news comes after rumours last month that the company was weighing up a sale of the studios.

According to initial reports from the Financial Times, the maker of both Coronation Street and Love Island is said to be actively reviewing whether to dump its stake in ITV Studios.

Analysts at Citi backed the move and estimated that ITV Studios  could be worth more than the whole of ITV’s £2.5bn market cap, estimating a value of roughly £3bn.

ITV Studios is the holding group for about 60 independent labels across 13 countries, making it one of the largest producers of scripted and unscripted content in Europe.

The broadcaster has had its eyes on expansion and snapped up a £103.5m majority stake in Plimsoll Productions,  the natural history programme, earlier this year.

“Growing ITV Studios with an exciting pipeline of premium programmes is core to our strategy as we further diversify the business by genre,” ITV chief executive Carolyn McCall said at the time.

A sale would also mean a respite from the increasingly squeezed advertising budgets, which continue to tighten the firm’s free-to-air offering.

On top of this, a hefty injection of cash could come in handy as the broadcaster gears up to launch its own streaming service, ITVX, in time for the Qatar World Cup next month.