ITV (ITV LN) UK
Communications
While ITV describes itself as strongly cash generative, FY25 results tell a different story. Cash inflow from operating activities fell sharply from £333m to £202m. Forensic Alpha also identified several other red flags, pushing ITV’s Risk Score from '8' to '10' (max. rating). Working capital has been a persistent drag, with the headwind widening from £144m in 2024 to £196m in 2025. Trade receivables rose 12% to £500m despite flat sales, driven largely by long-term balances now representing 18% of the total. Contract assets increased 33%, including a jump in non-current contract assets from £4m to £39m. Meanwhile, exceptional charges related to restructuring and M&A rose from £65m to £107m, further weighing on cash flow. For now, the market is focused on the potential sale of the M&E business. If it falls through, attention will shift back to the company’s underlying fundamentals.
Edition: 232
- 20 March, 2026
ITV (ITV LN) UK
Communications
Following publication of its FY23 annual report, Iron Blue increases their ITV score to 31/60 (still top decile) from 29/60 to reflect: 1) FY23 cost strip outs hit a decade high. 2) Capitalisations of programme & other rights expanded +10% Y/Y, also to a decade high. 3) Increased use of provisions accounting. 4) DB pensions liability discount rate of 4.75% vs. 3.8% average. 5) A new contingent liability relating to the UK CMA investigation into non-sport TV content production and broadcasting. They also note that five of management’s principal risks were deemed to have increased Y/Y and FY23’s Oracle Fusion IT platform launch saw various processes and controls not operating as anticipated.
Edition: 185
- 03 May, 2024
Consumer Staples
ROCGA has recently launched a product that ranks companies using their own CFROI based DCF valuation modelling tools. The list contains the UK’s largest companies ranked according to warranted value, the most undervalued to the most overvalued. CWK appears in the top part of the list, along with Sainsbury, Imperial Brands and ITV. Among others, Sage and Ocado appear at the bottom. ROCGA also covers the US and European markets, with over 2,150 companies in total.
Edition: 168
- 01 September, 2023
Communications
A score of 27/60 is top quartile overall (fertile ground for shorting) and joint highest (with WPP) in Ed Steele’s Media sector coverage. Accounting red flags include management discretion within revenue recognition, elevated levels of stripped out costs, possible net debt adjustments (restricted cash, earnouts, contingent liabilities), JV related party transactions and use of non-GAAP headline measures. Ed notes several areas where disclosure could be improved, including the segmental split, amortisation charge and contingent liabilities. He also highlights that eleven of management’s fifteen principal risks were deemed to have increased yoy.
Edition: 145
- 30 September, 2022
TV Companies: Is the Secular Decline Thesis Overdone?
Communications
Following a review of six of Europe's TV companies Willis Welby argue that not only is their reach to consumers materially better than the long-term bears would have you believe, but these companies all look extraordinarily cheap! Willis Welby continue to be particularly bullish on ITV - positive momentum and it is likely to make a mockery of an implied to Y3 EBITM ratio of barely 30. While TF1 also looks very interesting following its proposed merger with Metropole TV.
Edition: 113
- 25 June, 2021