Commercial broadcaster ITV said companies were holding back from buying advertising in the build up to next month's European Union referendum in Britain, prompting it to lower its forecast for first-half ad revenues.

The British company said it expected net advertising revenue to be broadly flat for the first half, rowing back from its view two months ago when it said the European soccer championships would lift revenue.

It said, however, that it expected to deliver good profit growth in its first half to end-June, helped by a solid performance from its ITV Studios production unit.

“ITV is now a much stronger and more diverse business and we expect to deliver good profit growth in the first half,” the company said.

“This is against the backdrop of uncertainty in the UK advertising market, which we have experienced since the debate over Brexit began, and significantly higher share of our programme spend in the first six months.”

Shares in ITV reversed early gains on Thursday to trade down 0.5 per cent at 214 pence at 0719 GMT.

The company, which broadcasts shows including Coronation Street and Britain’s Got Talent, said overall revenue grew 14 per cent to £755 million in the three months to March 31st.

It said the share of viewing on its main ITV channel, which performed badly last year, was up 3 per cent in the first four months of year.

Analysts said ITV’s update confirmed anecdotal reports that advertising had been below expectations in the second quarter, with late money not being spent due to uncertainty around the June 23rd vote.

Broker Numis lowered its outlook for ITV’s advertising revenue growth for the year to 1 per cent from 4 per cent, and downgraded its pretax profit expectation by 3 per cent.

“We see scope for advertising to rebound when Brexit uncertainty is resolved and stress that with a far greater base of profitability and transformed balance sheet, ITV is much better placed to weather a downturn than in 2008,” Numis analysts said.

Reuters