ITV FY 22 – 02/03 – back in September the ITV share price hit its lowest level in two years but has since undergone a decent recovery of over 50%, helped by anticipation of a pickup in advertising revenue due to the World Cup in Qatar.
In November ITV reported total revenue year to date rise by 6% from a year ago to £2.95bn, however the advertising business proved once again to be somewhat of an Achilles heel. The Q3 numbers were expected to be disappointing, and were, falling 2% for the year to date at £1.56bn, with July down 9%, August down 21% and September down 14% compared to the same period in 2021. TAR is expected to decline between 1% and 1.5% over the full year, with October down 9% and November expected to be up 3%, while December is expected to be 5% to 10% higher with the World Cup expected to offer a decent pick me up. The underperformance in advertising was offset by the outperformance of ITV Studios, which saw a 6% increase in revenues to £1.39bn, offering encouragement as the production part of the business looks to generate almost 50% of total revenues. The outperformance of this business has prompted some speculation that ITV, or more to the point its studios business might be in the crosshairs of possible bid speculation earlier this year. We will also find out how well ITV's new ITVX ad-funded offering has performed after rolling out on December 8th. In January ITV announced that its revamped ITVX service delivered a 55% increase in viewing in December, as well as a 65% increase in online users. ITV says it hopes to deliver at least £750m in digital revenues by 2026.
Ocado FY 22 – 28/02 – it's been a choppy few months for the Ocado share price, its traded in wide range since its 5 year lows back in October.
The shares rallied strongly in November on the back of the deal it signed with South Korea's Lotte Shopping, however since those peaks the air has come out of the recent rebound. In January Ocado shares got off to a flier, however the Q4 trading update took a lot of the fizz out of that strong start. Q4 revenues rose by 0.3% to £549.4m, well below the company's estimate of mid-single digit sales growth. In its defence Ocado did warn in Q3 that Q4 sales were likely to be affected by energy cost headwinds, which would in due course weigh on profitability The news was still disappointing with the company warning that customer basket sizes would probably keep falling in 2023, with average basket value down 1.3% year on year. For the full year, revenue is expected to fall by 3.8% to £2.2bn, despite an increase in full year average selling prices of 4.4%, however a 12.1% annual decline in basket volumes has offset that. The company said it was still on target to break even on an EBITDA basis for the full fiscal year. Ocado also managed to grow its market share to 12.3%, from 11.7%, however it is clear that margins are likely to continue to get squeezed in what is an extremely competitive groceries market.
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Haleon FY22 – 02/03 – Since its launch on public markets in July it's been a rocky start for Haleon, the consumer business that was spun out of GSK, and which saw GSK management reject a £50bn bid by Unilever a year ago.
It was clear then that decision was likely to prove an expensive mistake and so it has proved, although we have finally managed to recover back to the IPO levels of 330p. The shares fell as low as 244p in September over concerns about litigation with respect to Zantac, an antacid drug, which is said to cause side-effects. Management has pushed back on the idea that they should shoulder liability over the antacid drug. In their Q3 trading update Haleon delivered a solid set of numbers with reported revenues rising 16.1% as well as a 12.2% rise in reported operating profit of £569m. The company also raised its full year guidance of organic revenue growth to an increase of between 8% and 8.5%. The quarterly outperformance was driven primarily by sales of cold and flu remedies, although margins slipped 70bps to 19.7%, despite the company increasing prices. This is likely to be a key area of focus as we get set for its first full year numbers as a public company as well as its guidance for 2023.
