ITV to Rejoin U.K.’s FTSE 100 Benchmark as Pandemic Curbs Ease
(Bloomberg) -- Broadcaster ITV Plc will rejoin the U.K.’s large-cap stock benchmark, replacing Renishaw Plc, as easing pandemic restrictions fuel expectations that advertising revenue will recover.
The media group will replace Renishaw after the close of business on June 18, index provider FTSE Russell said. Courier Royal Mail Plc is also joining the index, while RSA Insurance Group is dropping out after its acquisition by Danish insurer Tryg A/S.
ITV’s exit from the blue-chip benchmark in September capped a nine-year run, as worries over the Covid-19 pandemic affecting advertising spending along with the popularity of streaming services like Netflix Inc. saw the broadcaster’s shares lose more than half their value in the first nine months of 2020. The postponement of European soccer championships and reality show Love Island due to the coronavirus outbreak also weighed.
ITV’s shares have rebounded this year, gaining 23% as the rollout of vaccines speeds up economic reopenings. The British broadcaster said it expects advertising revenue to climb 26% in the first half of the year compared to 2020. Royal Mail, meanwhile, saw a boost from housebound consumers shopping more online during the lockdowns, with its shares surging 76% this year.
“I think there is more of an optimism with regard to consumer-facing companies in general,” Shore Capital analyst Roddy Davidson said by phone. “Certainly the industry forecasts suggest a pretty strong bounce-back in terms of advertising this year and probably also decent growth coming down the track over the next couple of years.”
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