STV to cut costs and scrap dividend

STV CEO Simon Pitts

Glasgow-based media firm STV Group plc said in a trading update on Thursday it has taken steps “to ensure STV remains financially resilient” amid the coronavirus crisis. 

“We are very focused on cash and have already taken steps to reduce costs and cash commitments,” said STV.

“National programming costs will reduce in line with any reduction in revenues … and we have identified a further £2m of other cost savings across the business for 2020, along with c.£2.5m of cash savings from delayed capital expenditure.

“As an additional measure to ensure maximum flexibility, it is also confirmed that our board is no longer recommending a final dividend of 14.7p per share (financial year ended 31 December 2019) and this will no longer be paid, conserving a further £5.5m.

“We recognise how important the dividend is to our shareholders and the board will revisit the position for future dividends once there is greater clarity on the impact of COVID-19 on the business.

“Taken together these actions will ensure that at least an additional £10m of cash (over and above current cash balances) is retained within the business in the short to medium term …

“STV has good ongoing access to liquidity through its £60m overdraft and revolving credit facility. 

“Net debt was £37.5m at the end of 2019 and is expected to be c.£38m at the end of March 2020, comprising cash balances of £10m and £48m of drawn down facility. 

“The unutilised portion of the facility is £12m and this is accessible under the terms of the agreement.”

STV chief executive Simon Pitts said: “We have implemented contingency plans to keep our programmes on air, especially our news coverage, have taken decisive steps to reduce costs, manage our cashflow and make funding available to support the local businesses and charities in Scotland who now need it most, and we remain committed to our successful growth strategy for the long term.”