ITV Advance Ad Bookings Sag as Merrill Downgrades Carlton

31 October 2001

Yet more bad news for Britain's ITV Network.

Word has reached the entrail-rakers that advance ad bookings for November and December have again slowed and currently stand at minus 25% year-on-year, a decline on the previous guessstimate by Merrill Lynch of minus 12%.

According to the Thundering Herd: “There is also a particular dearth of advertising for luxury goods normally associated with Christmas, while affordable goods, such as music and video, are buoyant. However, the more serious issue is the effects on consumer spending following the plummeting of consumer confidence and rising unemployment.”

Merrill also points to the decline in ITV viewership, now down 6.5% for the year to date compared with the BBC1’s loss of only 0.7%. Respectively, the two channel’s current audience share stand at 27.3% and 26.5%.

Merrill has accordingly reduced its estimates for ITV ad revenues for the twelve months to September 2002. Having previously predicted a fall of 7%, the seer latest prognostication is minus 9.7%. Extending the period to December 2000, the earlier prediction of 0% growth widens to a minus of 2.7%. Signs of recovery are unlikely unto Q4 2002.

Merrill then retuned its crystal ball to Carlton Communications, deeming its shares an “unattractive” buy and downgrading them to a Reduce/Neutral rating.

Carlton’s ITV partner Granada Media fared somewhat better in Merrill’s estimation, earning a Neutral/Accumulate rating.

News source: Merrill Lynch