STV shake-up ‘vindicated’ says Pitts after uplift in profits
Simon Pitts: exciting growth
STV chief executive Simon Pitts said the shake-up and repositioning of the broadcaster had been rewarded with strong first half figures in a tough commercial television market.
Adjusted operating profit increased by 10% to £11 million (2018: £10m) on a 5% decline in revenue. The growth in the regional advertising market more than offset the decline in national advertising.
Mr Pitts, chief executive, said: “An operating profit increase of 10% when national advertising revenues are down supports the decisions we took to reposition the Group for profitable growth, focusing on STV’s regional strengths and the exciting growth potential offered by our digital and production businesses.
“In the first half of 2019 we have enjoyed the best all time viewing share on STV since 2009 and our total advertising revenue has outperformed the wider TV market, driven by continued growth in digital and regional advertising and by the increasing success of the STV Growth Fund which has attracted over 100 new Scottish advertisers to television since launch. These factors have contributed to a strong first half performance, with a significant improvement in operating margin.
“We continue to make good progress with our strategic growth plan and have laid solid foundations for the future. Although current political uncertainty around Brexit will continue to impact total national advertising revenue in the second half, we expect further growth in digital and regional revenue and an improved performance from STV Productions, including a new quiz format, The Cash Machine, the first commissions from newly acquired Primal Media, and a new drama for BBC1, Elizabeth is Missing.
“We also have an exciting programming line-up to look forward to on STV in the second half of the year, with exclusive coverage of the 2019 Rugby World Cup, new dramas like A Confession and Sanditon, and entertainment juggernauts like Britain’s Got Talent The Champions and I’m a Celebrity helping to drive viewing on screen and online.”
The company declared an interim dividend of 6.3p (2018: 6p)
National advertising will continue to be impacted by Brexit, with the 9 months until the end of September expected to be 6% to 7% down
· Regional advertising expected to be 10% to 15% up until the end of September
· Digital advertising is expected to be 20% to 25% up for the same period
· Overall, that would see total STV advertising broadly flat for the first 9 months to the end of September
· Productions will have a stronger H2, with current secured revenues of £13m similar to this time last year
STV Productions drama The Victim delivered the highest drama catch up ratings since records began, more than doubling its BBC1 overnight audience to 6.5m, and has now been sold to more than 30 countries.