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.”