ITV (ITV.L) posted strong results for the first half of 2021, with its advertising revenue getting a major boost from viewers watching the UEFA Euro 2020 football tournament.
“Our H1 results demonstrate that ITV is emerging from the worst effects of the pandemic as it looks to accelerate its transformation to a digitally led media and entertainment company," said CEO Carolyn McCall.
"We are optimistic about the future, despite the ongoing pandemic risk on our advertising and ITV Studios revenues."
Total revenue was up 27% to £1.5bn ($2.1bn), driven by 26% growth in the money brought in by ITV Studios, which was £798m, an increase of 26%, thanks to a majority of programmes being back in production.
“ITV Studios has prowess in picking star players here, producing six of the 10 top-rated UK dramas including Line of Duty, and selling The Chase to the US, Germany and Australia,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
Ad revenue saw a 29% increase.
The broadcaster said June 2021 had the largest advertising revenues for the month ever in its history. This was in large part due to the Euros.
Total viewing was down 6% in H1 amid the easing of lockdown restrictions but the company saw strong ratings from programmes including Unforgotten, Saturday Night TakeAway, The Masked Singer and the start of Love Island.
It's on track to deliver its £30m cost savings target over the full year.
Given the current uncertainty ITV will not declare an interim dividend but, assuming the economy continues to recover, the board intends to propose a final dividend of 3.3p for the full year 2021.
It hopes to grow the ordinary dividend over time.
“Bringing back the dividend is a welcome development for shareholders, and not unexpected given these resilient numbers," said Streeter.
The company’s shares ticked up early on Wednesday morning but were down 0.4% at the time of writing.
“Given the crisis faced by the broadcaster during the depths of the pandemic, a bounce back was expected but the trajectory is sharper than some expectations and that helped boost the share price in early trading,” said Streeter.
She added that the best may be yet to come as the results don’t reflect the entire football tournament.
“Given ITV’s exclusive rights to showing that game, it will have kicked off a frenzy of ad spend and although coverage of the final was shared with the BBC, companies will have paid handsomely to be part of the action.”
But she warned that “COVID restrictions on set are still proving a costly headache, particularly for location shoots”.
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