Glasgow-based media firm STV Group said it would return £10 million to shareholders over the next 18 months and increase its dividend despite revenue slipping 3% to £54.6 million and pre-tax profit falling 26% to £7.5 million in the first half of the year.

STV declared and interim dividend of 5p per share, up 25% year on year, and proposed total 2017 dividend of 17p per share, up 13%.

The media company said its trading arrangements with ITV provided it with a buffer against weakness in the national advertising market — down 10% in H1 — and changing macro-economic circumstances.

STV said it enjoyed continued strong profitable growth in digital activities with revenue up 14% at £4 million and a margin of 50%.

STV said earlier this month that ITV executive Simon Pitts will join STV as chief executive officer on January 3, 2018, succeeding Rob Woodward, who announced in April 2017 he would step down as CEO within 12 months.  

Woodward said: “Significant markers of progress have been delivered during the first half of 2017 including the launch of STV2, a new channel for Scotland, which will enable the company to continue to grow its share of the Scottish market.

“Digital activities continue to deliver double digit growth while maintaining high margins after taking account of additional investment to support future development.

“STV Productions has built a good pipeline for the rest of this year and into 2018 with a number of commissions secured in the period, including a new drama series for BBC1.

“The performance of the business in the first half of 2017 is in line with expectations despite the weak advertising market.

“The board’s confidence in the underlying financial strength of the business is conveyed through today’s announcement of an additional return of capital to shareholders.

“The board expects to propose a full year dividend of 17 pence per share.”