STV shares up despite 19% revenue fall to £44m

STV CEO Simon Pitts

Shares of Glasgow-based media firm STV Group plc rose about 6% on Tuesday despite the firm publishing half year results to June 30 showing its revenue fell 19% to £44.7 million and that it made a statutory loss before tax of £4.9 million compared to a £9.1 million profit for the same period of 2019.

The company said it enjoyed its highest audience growth ever of 12%, “with all time viewing share of 19.2%, and growth continuing post lockdown.”

STV said its digital business accelerated rapidly, with online viewing growing 86%.

The results included a plan to pay an interim dividend equivalent to 3p per share via a bonus issue of new ordinary shares and a vow to reintroduce a cash dividend at the earliest opportunity.

Also on Tuesday, STV Studios announced the addition of a new label to its portfolio — factual entertainment producer Barefaced TV.

STV Group’s adjusted profit before tax for the first half — before exceptional items and IAS19 interest — fell 56% to £4.4 million.

Total advertising revenues fell 20% to £39.1 million.

“Digital revenues were impacted to a lesser extent, and buoyed by a strong performance in Q1 2020, returning 5% growth year on year and H1 revenues of £5.9m,” said STV.

STV CEO Simon Pitts said: “I am extremely proud of how everyone at STV has responded to the Covid-19 pandemic.

“Our record audience growth in the first half, up 12% on TV and 86% online, illustrates the enduring power and relevance of public service broadcasting, particularly STV’s local news which has been a vital lifeline for millions of Scots during this crisis …

“While our advertising and production revenues have been significantly impacted by Covid-19, we have been able to mitigate nearly half of the impact thanks to the proactive steps we have taken and our variable cost model.

“The successful share placing in July has also significantly strengthened the balance sheet and given us the confidence to continue to invest behind our growth strategy.

“The outlook is much more positive in H2, with advertising trends improving materially in July and August, and a strong schedule to look forward to on TV and online including the return of a full complement of weekly soap episodes from later this month, new drama like Des starring David Tennant, and entertainment juggernauts like the rescheduled BGT live finals and I’m a Celebrity.

“We have also successfully accelerated our diversification strategy during lockdown.

“Our digital business reported continued revenue growth in H1, with the increasing popularity of our digital-only content (now 30% of viewing) and the recent UK-wide launch of STV Player on Virgin Media and Freeview Play illustrating our future growth potential. 

“In the production business we are busier than ever and have secured 7 new commissions and 4 recommissions so far this year, including new 6-part returnable drama series Screw for Channel 4 and 8-part Sky series Landmark. 

“I was delighted that Catchphrase was the first entertainment show in the UK to resume filming, and all of our shows are now back in production under new safety protocols. 

“Our new creative partnership with Barefaced TV will target younger-skewing factual entertainment formats and establishes a 7th creative label within the newly rebranded STV Studios, which aims to become the UK’s leading nations and regions producer.”

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.