Tue, Jul 18, 2017 - Page 10 News List

EasyJet chief to resign to run UK’s ITV

Bloomberg

EasyJet CEO Carolyn McCall poses for a photograph in Moscow’s Red Square on March 19, 2013.

Photo: Bloomberg

EasyJet PLC chief executive Carolyn McCall is stepping down from the discount carrier to take up the same role at ITV PLC, the UK broadcaster that is dealing with a slowdown in advertising amid recurrent takeover speculation.

McCall is to leave EasyJet around the end of the year and join ITV on Jan. 8, the companies said in separate statements yesterday.

A search for a successor has already begun, the Luton, England-based airline said.

McCall, 55, took over at EasyJet in July 2010 after rising to the helm of the Guardian Media Group.

As the replacement for outgoing ITV chief executive Adam Crozier, McCall is to inherit a business that is cutting jobs and slimming costs as it faces declines in advertising sales with retailers wary over the short-term outlook for Brexit and rising inflation.

Crozier took over the top job in 2010 and has worked to rejuvenate the UK’s biggest free-to-air broadcaster, building up its ITV Studios production arm to reduce its reliance on advertising.

Ad sales made up 47 percent of ITV’s overall revenue last year, compared with 64 percent in 2010, the year Crozier joined. ITV’s shares have almost tripled since Crozier became CEO.

McCall’s experience at Guardian Media, which owns the Guardian and the Observer newspapers, makes her well-suited to tackling the challenges faced by ITV, Cenkos Securities analyst Alex DeGroote said.

Arresting a recent decline in ad sales, improving the quality of ITV’s online video offering and warding off the challenge from international streaming services, such as Netflix, will be McCall’s top priorities and a “monumental” task, said Neil Campling, an analyst at Northern Trust Capital Markets in London.

Billionaire John Malone’s Liberty Global PLC owns about 9.9 percent of ITV, which is a perennial subject of takeover speculation, talk that has intensified since the Brexit vote.

At ITV, McCall will be running a company that has less revenue than EasyJet yet is more highly valued in the stock market. The broadcaster had £3 billion (US$3.9 billion) of revenue last year and has a market capitalization of £7 billion pounds, while EasyJet’s sales were £4.7 billion and its value is £5.6 billion.

The next EasyJet CEO must “increase focus on cost management and possible restructuring,” Sanford C. Bernstein analysts Daniel Roeska and Caius Slater on Sunday wrote in a note to investors.

“We think bringing in an external candidate, given the required qualifications, with fewer ties to the organization and a fresh view, may be beneficial for shareholders,” Slater said.

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