May 6, 2020

Opening Quote: ITV cuts costs as ad revenues collapse

Production of new content at ITV studios has been mostly paused since mid-March: in the three months to March revenues for the studios arm fell 11 per cent year-on-year to £342m while revenues overall were down 7 per cent to £694m. ITV has moved to cut costs to offset the decline in revenues. It is trimming overhead costs by £60m, saving £30m in capital spending and reducing its programme budget by at least £100m. Fifteen per cent of staff are furloughed, there is no final dividend for last year and £150m of pension payments have been delayed. Revenues for its retail business - the home delivery service it offers - are up 40 per cent so far in the second quarter, compared to a 10 per cent year-on-year increase in the first quarter. FTSE 100 group Smith & Nephew had an even worse April than ITV. April revenues for the medical devices maker dropped 47 per cent, as elective surgeries have come to a halt in many countries. The world's largest entertainment company reported a 91 per cent drop in net income for the three months ending in March as the pandemic forced the closure of theme parks and cinemas.

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