STV swings to profit despite revenue falling to £55m

STV CEO Simon Pitts

Glasgow-based media firm STV Group plc said on Tuesday its revenue for the six months to June 30 fell 5% to £54.9 million “primarily due to phasing in STV Productions and closure of the loss-making STV2 …”

However, STV Group said it swung to a profit before tax of £9.1 million after a loss of £4.3 million for the same period of 2018.

Interim dividend per share will rise 5% to 6.3p.

STV shares rose about 4.5%.

STV Group CEO Simon Pitts said: “We continue to make good progress with our strategic growth plan and have laid solid foundations for the future.

“Although current political uncertainty around Brexit will continue to impact total national advertising revenue in the second half, we expect further growth in digital and regional revenue and an improved performance from STV Productions, including a new quiz format, The Cash Machine, the first commissions from newly acquired Primal Media, and a new drama for BBC1, Elizabeth is Missing.

“We also have an exciting programming line-up to look forward to on STV in the second half of the year, with exclusive coverage of the 2019 Rugby World Cup, new dramas like A Confession and Sanditon, and entertainment juggernauts like Britain’s Got Talent The Champions and I’m a Celebrity helping to drive viewing on screen and online.”

Analysts at Peel Hunt wrote: “These are strong interim results, with profit ahead of forecast.

“Both regional and digital advertising grew 19% in H1 to give a total advertising broadly flat.

“And if short term production numbers reflect timing of delivery, strategic progress has also been made here.

“Forecasts will be reduced modestly (-2.7%) with investment in production absorbing profit, offset by real margin benefits in Digital and Broadcast.

“Brexit remains a macro concern, but one faced with a very beneficial trading structure with ITV. We retain the Buy recommendation.”

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.