STV shares fall 6% as it sells 17.99% of the firm

STV CEO Simon Pitts

Shares of Glasgow-based media firm STV Group plc fell 6% on Wednesday after it said it raised £16.2 million by selling new shares in the firm representing 17.99% of the company’s issued share capital.  

“The board considers that the proposed placing is a prudent step to strengthen the balance sheet and ensure that STV is in a strong position to continue to deliver its successful growth strategy when market conditions normalise … ” said STV.

“STV has taken proactive measures to mitigate the commercial impact of COVID-19, including cash savings of approximately £18 million for the year ending 31 December 2020, increasing bank facilities from £60 million to £80 million, as well as postponing pension contributions …

“While the economic outlook remains uncertain, the board is confident in the long-term prospects of the group, and there are modest signs that trading is stabilising and starting to improve; total Q1 2020 advertising revenue was slightly down (-1%), and, as a result of the impact of COVID-19, total advertising revenue was down 42% in April, 39% in May, with a further modest improvement expected in June …

“In the meantime STV’s strong viewing performance has continued into Q2 2020, with broadcast viewing up 13% and online viewing up 70% year to date.”

STV CEO Simon Pitts said: “Over the last two years STV has been transformed into a leaner, more creative, digital-first media company that has been delivering a consistently strong viewing performance alongside double digit operating profit and earnings per share growth. 

This placing is designed as a prudent step to strengthen the balance sheet and support the continued delivery of our successful growth strategy when market conditions normalise.  

“While the short-term outlook remains uncertain, our on-screen performance continues to be excellent, we are starting to see modest signs of improvement in the advertising market, and the board is confident in the long-term prospects of the group.”

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.