STV hikes dividend despite fall in revenue and profit

STV CEO Simon Pitts

Glasgow-based media firm STV Group plc said it will increase its dividend despite reporting that 2017 revenue fell 3% to £117 million and statutory pre tax profit fell 11% to £13.9 miilion amid a “weak 2017 advertising market and ongoing UK macro-economic uncertainty.”

STV is proposing a final ordinary dividend of 12p per share and a full year dividend of 17p per share, up 13%.

STV said a strategic review of its business is underway under new chief executive Simon Pitts.

Shares of STV rose about 4%.

The media firm said it is “continuing to deliver profitable digital growth with revenue up 14% at £8.4 million and digital margin at target level of 55%.”

STV said more than 60% of the Scottish population are now registered users of STV services, “significantly ahead of all other UK broadcasters.”

The company said STV Productions is back in the high end drama business with the commission of BBC1 drama series The Victim.

It said it has made a strong start to 2018, “with secured revenue already 25% ahead of full year 2017.”

Pitts said: “The results announced today are broadly in line with expectations, reflecting a weak 2017 advertising market and ongoing UK macro-economic uncertainty. 

“Despite this, the resilience of our broadcast business has ensured a solid performance and a higher margin. 

“In addition our digital business has continued to deliver profitable growth, at a margin of 55%.

“2018 has started strongly across all parts of the business, with both national and regional advertising expected to be up in the first quarter.

“We’re also delivering good growth in digital driven by increased viewing on the STV Player, and STV Productions has already secured 10 new commissions in 2018, including a number of returning and returnable series.

“Since joining in January, I have begun to work with colleagues across the business to assess performance and develop plans for growth. A further update will be confirmed during Q2.”

STV chairman Margaret Ford said:When I was appointed chairman, I stated my intention to deliver value to our shareholders through the introduction of a progressive dividend policy.

“This decision reflected the board’s confidence in the underlying financial strength of the company and the resilience of the core business, despite macro-economic uncertainty placing downward pressure on the advertising revenue market during this period.

 “We have delivered on this commitment since 2013, and I am pleased to propose a final ordinary dividend of 12 pence per share, resulting in a total dividend of 17 pence per share, an increase of 13% year on year. 

 “In line with this commitment to the long-term delivery of increased shareholder returns, in August we announced the board’s intention to return an additional sum of £10 million capital to shareholders over a period of up to 18 months and the share buyback process is continuing.”