Revenue up at broadcaster
STV boss Pitts hails The Victim in strong start to year
Kelly Macdonald starred in the drama series The Victim
STV chief executive Simon Pitts will hail a strong start to the year, underpinned by its critically-acclaimed first drama commission for the BBC.
Mr Pitts will tell shareholders that advertising revenue and viewing figures are up and that The Victim will be followed by a second drama commission for the BBC.
In a pre-AGM statement, Mr Pitts said The Victim “represents just the sort of landmark programming we want to do more of in future.”
Investors heard that business performance continues in line with expectations and previous guidance. Trading to the end of May will show total advertising revenue up 2%, reflecting STV’s increasing resilience in the market, although national advertising is down.
Regional advertising is continuing to perform strongly, driven by the on-going success of the STV Growth Fund which has now partnered with more than 130 Scottish advertisers, over half of whom are new to TV. Digital revenues are also expected to be up, reflecting continued strong growth from the STV Player.
STV’s Production business continues to perform in line with expectations with revenues secured by end of Q1 now equivalent to more than 60% of the total achieved in 2018.
Despite the positive trading performance, 29.54% of shareholders voted against the company’s remuneration report.
Advertising revenue performance is underpinned by a strong viewing performance, with STV peak time viewing share in Q1 2019 in line with last year’s very strong Q1 and all time viewing share up a further 4%. STV’s 2018 viewing performance was its best in a decade and this strong performance has continued in Q1 2019 with share gains across all key demographics.
STV Player continues to grow strongly, with online viewing up 20% and streams up 28% in Q1 driven by hit dramas like Manhunt, Cheat and The Bay.
Production had secured over 60% of its 2018 revenues by the end of Q1 2019, including a number of re-commissioned series. This includes the BBC re-commissioning series 19 and 20 of ratings success Antiques Road Trip and a further series (series 9) of Celebrity Antiques Road Trip, both for delivery in 2019.
During the period, STV Productions’ first ever drama commission for the BBC, The Victim, aired in peak time on BBC1 to widespread critical and popular acclaim, with episode 1 consolidating to over 6.5 million viewers so far. Production of a second drama commission for BBC1, Elizabeth is Missing, will commence in July.
Investment in key creative talent has continued during the period. Following his appointment as Managing Director of STV Productions in November, David Mortimer has appointed producer and commissioner Craig Hunter, pictured, to the key position of Creative Director, Factual. Mr Hunter’s most recent commissioning successes include Blue Planet Live and Inside the Factory and he has worked across a huge range of formats and returning series.
Based in Scotland, Mr Hunter’s experience of production in the nations will support the strategy to deliver production out of Scotland for both UK and international broadcasters. His appointment completes a senior creative team alongside Sarah Brown, creative director, drama; and Gary Chippington, creative director, entertainment.
As announced last week, agreement has been reached with the trustees of the company’s two defined benefit pension schemes on a deficit funding plan following the 2018 triennial valuation. This new 12-year recovery plan will fund a pre-tax deficit of £127m as at 28 February 2019 and, significantly, will result in both schemes reaching a funding level of self sufficiency by the end of the recovery period.
The funding plan is based on annual funding payments equivalent to the previous recovery plan with the 2019 payment of £9.0m increasing annually at 2% per annum until October 2030.
Lindsay Dixon will become Chief Financial Officer on 21 May, replacing George Watt who will step down from the board today and leave the company on 30 April to pursue a non-executive career following over 20 years with the company.
Mr Pitts, chief executive, said: “We have made a strong start to 2019, with TV and online viewing levels continuing their positive momentum from 2018 and total advertising revenue also growing, demonstrating STV’s increasing resilience in the advertising market even in an uncertain economic climate.
“Our STV Growth Fund goes from strength to strength, underpinning strong regional advertising sales and bringing new advertisers to television for the first time.
“We are immensely proud of our new Scottish drama series – The Victim – which aired on BBC1 earlier this month to huge critical and popular acclaim and represents just the sort of landmark programming we want to do more of in future.”
“We also look forward to welcoming Lindsay Dixon as chief financial fficer in May and wish George Watt every success following a stellar 20 year career at STV.”