Better start to year
New STV chief positive despite dip in profits
Simon Pitts: developing plans for growth
Simon Pitts, the newly-appointed chief executive of STV, reported a slight dip in profits amid a weak advertising market and fewer commissions.
In his first declaration since succeeding Rob Woodward in January, Mr Pitts said 2018 has begun strongly as advertising picks up.
Pre-tax profits for the year to the end of December came in at £18 million against £18.5m in the previous year as advertising revenue fell by 7%. Digital revenue rose14% to £8.4m.
The board has recommended a final dividend of 12p per share making 17p for the full year, up 13% year on year.
Group revenue fell from £120.4m to £117m. STV Productions’ revenues were down 20% at £10.4m (2016: £12.7m), as a result of fewer commissions.
Mr Pitts said: “The results announced today are broadly in line with expectations, reflecting a weak 2017 advertising market and ongoing UK macro-economic uncertainty.
“Despite this, the resilience of our broadcast business has ensured a solid performance and a higher margin. In addition our digital business has continued to deliver profitable growth, at a margin of 55%.
“2018 has started strongly across all parts of the business, with both national and regional advertising expected to be up in the first quarter. We’re also delivering good growth in digital driven by increased viewing on the STV Player, and STV Productions has already secured 10 new commissions in 2018, including a number of returning and returnable series.
“Since joining in January I have begun to work with colleagues across the business to assess performance and develop plans for growth. A further update will be confirmed during Q2.”
Margaret Ford, chairman, said: “When I was appointed chairman, I stated my intention to deliver value to our shareholders through the introduction of a progressive dividend policy.
“This decision reflected the board’s confidence in the underlying financial strength of the company and the resilience of the core business, despite macro-economic uncertainty placing downward pressure on the advertising revenue market during this period.
“We have delivered on this commitment since 2013, and I am pleased to propose a final ordinary dividend of 12 pence per share, resulting in a total dividend of 17 pence per share, an increase of 13% year on year.
“In line with this commitment to the long-term delivery of increased shareholder returns, in August we announced the Board’s intention to return an additional sum of £10 million capital to shareholders over a period of up to 18 months and the share buyback process is continuing.”