ITV, Producer of ‘Love Island,’ Recorded a 21% Profit Drop in 2020 Amid COVID-19 Pandemic

By Adriaan Brits Tuesday, March 9, 2021

ITV, the British broadcasting company behind popular shows “Love Island” and “The Voice UK,” reported a sharp drop in profits for 2020 amid the COVID-19 pandemic.

ITV building in London, UK.

BritBox Subscriptions Surge in the US and Canada

ITV saw its adjusted earnings before interest, taxes, and amortization, known as EBITA, plunge by 21% to £573 million ($795.3 million) for 2020 from £729 million ($1.01 billion) in 2019.

The broadcasting company reported business revenues of almost £3.3 billion ($4.58 billion) for 2020, representing a decline of 16% year-over-year (YOY). In a similar fashion, earnings per share (EPS) plunged 22% to £0.11 ($0.15).

“While total revenues and profits were down our financial performance was ahead of expectations driven by a strong end to Q4 and our firm control over costs,” Carolyn McCall, CEO of the company, said in a statement.

Lower profits came after the TV business was forced to close production during the height of the COVID-19 crisis, while the lower spending on ads hit its advertising business unit, which recorded a decline of 11% to £1.57 billion ($2.18 billion) on a YOY basis.

The broadcasting company noted its revenue from the ad business soared 3% in the last quarter of the past year, but it warned of an expected decline of 6% in Q1 of a new fiscal year. The cancellation of sports events and the summer version of the popular reality show “Love Island” yielded lower viewing of ITV channels and streaming.

The COVID-19 pandemic forced closure of ITV Studios, the company’s business production arm. As a result, revenue of this business unit plunged to £1.37 billion ($1.90 billion), while EBITA crashed 43% to £152 million ($211.1 million). On a more positive note, 90% of shows are back in production, the company said.

The pandemic-related costs soared to force the broadcasting company to write down £116 million ($161.1 million), which is almost double the previously-communicated £60 million ($83.3 million).

BritBox, the company’s joint venture (JV) with the BBC that offers streaming services, has now amassed 2.6 million subscribers globally, thanks to a 50% rise in new users across the United States (US) and Canada.

“BritBox UK has seen good growth in subscriptions in the year, and as expected, the lockdown restrictions along with the increase in content and distribution of the service, increased the number of customers signing up for the free trial period. We have continued to see strong subscriber appeal and in January 2021,” ITV said in a statement.

Shares of ITV are up 2.9% in London today.

Summary

The British broadcasting company ITV reported lower profits and business revenues for 2020 amid the COVID-19 pandemic.

About the Author


Headshot of Adriaan Brits

An analyst of global affairs, Adriaan has an MSC from Oxford, with diverse interests in the digital economy, entertainment, and business. He is a specialist trainer in advanced analytics and media.

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