The broadcast mainstay reported ahead of its AGM on Thursday that its total external revenue had increased by 14% to £755m (2015: £665m) in Q1 2016.
The company also announced that its viewing share was up by 3% and its online viewing consumption had risen by 22% in a year’s time.
Adam Crozier, the chief executive of ITV, said the organisation’s “strategy of growing and rebalancing the business,” which included several acquisitions and maintaining “a healthy pipeline of new and returning programmes,” was the catalyst for this strong first quarter performance.
The broadcast titan also made a point of highlighting its strong non-advertising revenues, comprised of intersegment revenues from the sale of ITV Studios shows to the ITV network. ITV reported that its non-advertising revenues grew by 34% to £428m in the first quarter of 2016 and its net advertising revenue was down 13% in April.
The Share Centre’s investment research analyst, Graham Spooner, added that ITV “continues to benefit from its move away from a reliance on advertising revenue, where a backdrop of uncertainty remains in the UK advertising market partly as a result of the ongoing Brexit debate.”
“ITV is now a much stronger and more diverse business and investors should be reassured that despite a dip in performance, the strength of its cash generation and financial position gives it the flexibility for further growth,” he concluded.
Philip Harris, manager of the UK Equity Growth Fund at EdenTree Investment Management, also identified the broadcaster as “a classic cash compounder.”
“ITV’s high margin business and strong conversion of profit are generating an increasingly attractive return profile. Its balance sheet continues to be strong, offering further potential for acquisitions and special dividends,” Harris remarked.
Cozier expects ITV to continue “to deliver good profit growth in H1” and keep that momentum throughout 2016. Both ITV Studios and the company’s Online, Pay & Interactive are “on track for double digit revenue growth.”
“The strength of our cash generation and financial position gives us the flexibility to continue to deliver further growth across the business both organically and through acquisitions and partnerships,” he added.
Shares in the firm were trading 2% lower in morning trade.
