Glasgow-based media company STV said 2015 revenue fell 3% to £116.5 million but pre-tax profit rose 10% to £19.1 million as an increase in “non-broadcast” earnings including digital helped drive its business.
The company raised its dividend 25% to 10p per share.
The company said its digital revenues are already up 25% in the first quarter and this rate is expected to be maintained in the year ahead.
STV said 22% of its 2015 earnings came from non-broadcast activities “representing significant progress over the past five years when these activities represented only 11% of earnings.”
“Diversification to rebalance the business remains at the heart of the growth strategy for 2016 and beyond,” said STV.
The company said the growth of its non-broadcast business has been driven primarily by the development of its digital business.
“This (digital) has now evolved into a core area of activity, delivering significant growth in revenues, up 25% year on year to £6.6 million, and operating margin ahead of target levels with 48% achieved,” said STV.
However, at STV Productions, revenues fell 38% to £8.3 million in 2015, reflecting fewer commissions and lower deliveries.
STV said: “Returning series commissions were secured with ITV for a fifth series of Catchphrase and the BBC committed to a two-year order for a twelfth series of Antiques Road Trip and a fifth series of Celebrity Antiques Road Trip.
“In Q1 of 2016, a new commission has been secured with ITV2 for a second series of Safeword.
“The business also continues to build a reputation for the development of documentaries. The 7/7 Bombing: Survivors Stories was aired on ITV and, in autumn 2015, Rollermania: Britain’s Biggest Boy Band, aired on BBC Scotland and BBC Four.”
STV chief executive Rob Woodward said: “2015 returned a good performance for the group with operating profit above £20 million for the first time in eight years, generating steadily growing returns to shareholders and reducing net debt to its lowest level since the mid 1990s.
“Our investments and focus have put us in a strong position to deliver organic growth in the future and the increasing diversity of earnings improves the security of returns for our investors.”
The company said its core channel, STV, “continues to hold the position as Scotland’s most watched commercial channel and, for the sixth consecutive year, achieved a peak-time audience share in excess of the network … ”
It said the core STV channel reached 3.6 million viewers per month and showed 44 of the top 50 most watched programmes on commercial television.
The company said the second of its “City TV” services, STV Edinburgh, was launched in January 2015 and that both City TV services achieved an average monthly reach of 30% of the available audience.
“Revenues generated from City TV increased by 66% year on year to £1 million,” said STV.
“The services continue to be met with a positive response from advertisers with 130 new to television advertising and a number of these progressing to increase spend and advertise across other platforms in the STV Family…
“The recommendation made by Digital UK that the City TV channels should be able to move to Channel 8 on Freeview, following the move of BBC Three online, is welcomed. We expect a decision on DUK’s consultation process in the next week.
“Licences have been secured to deliver three additional services, in Aberdeen, Ayr and Dundee, and the launch of these is planned for early 2017. The City TV business remains on track to break even in 2017.”
The company said the enhanced STV Player, which includes “watch live” functionality, continued to drive engagement and increase its reach during 2015.