ITV has announced an additional £20m of net cost savings in 2024, as the broadcaster’s revenue dropped by 8% year-on-year to £2.74bn in the nine months to the end of September.

In its Q3 trading update, ITV Studios revenue dropped by 20% after being impacted by the phasing of deliveries and the 2023 US writers’ and actors’ strike.

Although ITV Studios is expected to deliver a record adjusted EBITDA in the full financial year, its revenue is expected to decline by mid-single digits, falling marginally year-on-year.

Total advertising revenue was flat in the quarter, while its streaming platform, ITVX “continued to perform strongly” with 14% and 15% growth in streaming hours and digital advertising revenue respectively.

The additional £20m cuts comprise of a £10m reduction in content costs and a further £10m in the early delivery of non-content savings planned for 2025.

Chief executive at ITV, Carolyn McCall, said: "ITV Studios has had an excellent start to Q4, in line with expectations, which will ensure it achieves record profits in 2024. Studios has great creative and commercial momentum as demonstrated in the last few weeks with shows including Rivals for Disney+ and Ludwig for the BBC and is on track to deliver good revenue growth in 2025 and 2026.

"Our cost saving programme is progressing well and today we are announcing further cost savings in addition to the previously announced £40m of incremental cost savings through restructuring, improved efficiency and simplifying ways of working. Coupled with our strategic delivery and revenue outlook, this continues to give us the confidence that we will deliver an increase in group profit this year."

In its outlook, ITV said that its studios is expected to deliver total organic revenue growth of 5% on average per annum from 2021 to 2026.

Furthermore, its media and entertainment division is set to see total advertising revenue increase by 2.5% year-on-year in the full year, with Q4 expected to be down between 6% to 7% as a result of the 2023 Rugby World Cup.

It remains on track to deliver at least £750m of digital revenue in 2026.

Head of markets at interactive investor, Richard Hunter, concluded: "Despite the progress which is being made within ITVX and Studios, investors remain skittish on prospects, as evidenced by an initial share price reaction which reflects the broader and more obvious concerns around general advertising revenues.

"ITV has flitted in and out of the premier index over recent times, and although the shares have risen by 10% over the last year, as compared to a gain of 15% for the wider FTSE 250, over the last three years a decline of 35% has been more telling. The market consensus of the shares as a cautious buy, however, perhaps offers some positive hope that the group can deliver its own strategic progress."

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