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STV upbeat and adds Barefaced TV after loss

Simon Pitts

Simon Pitts: record audience growth

STV said trading has improved in recent weeks and it has added Barefaced TV to its portfolio after the lockdown saw it fall to a £4.9 million half year loss from a £9.1m profit last time.

Adjusted profits before tax, which is before exceptionals, fell 56% to £4.4m (£10.1m).

Total advertising revenue was down 20%, with national down 23% and regional impacted to a lesser extent, down 18% Group revenues are down 19% at £44.7m (£54.9m).

However, the Glasgow-based broadcaster said advertising trends have improved materially over the summer, with total advertising revenue down 7% in July and up 1% in August. Regional revenue returned to growth in July and August, with VOD also growing again in August.  STV’s digital business is expected to continue to grow strongly.

The production hiatus caused by Covid-19 will impact revenue rather than profitability in 2020, with £15 to £20m of commissions already secured for 2021. All STV programmes are now back in production under new safety protocols.

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The company was confident enough to declared an nterim dividend of 3p per share to be satisfied by way of a bonus issue of new ordinary shares.

Digital revenues are up 5%, with VOD revenue from STV Player +13%.

Studios revenue was down 17% reflecting the pause in filming in Q2, but profit impact wholly mitigated by strong secondary sales and cost savings.

New label added to studios

STV Studios has added a new label to its portfolio, factual entertainment producer, Barefaced TV.

Founded by Rosie Bray and Lucy Golding in 2017, Barefaced TV has already built a reputation for original and surprising content.  Its most recent production is Channel 4’s Naked Beach, an ambitious format which was one of Channel 4’s top ten new factual entertainment 8pm series launches in 2019 and has sold well internationally, including a US option and a German remake.

Rosie and Lucy are also the team behind BBC Three’s Snog Marry Avoid, where the pair first met. Prior to forming Barefaced TV, they created BBC2’s Restaurant Wars and Channel 4’s The Millionaire Party Planner. They then became joint heads of factual entertainment at NBCUniversal’s development unit, where they worked with now STV Studios MD, David Mortimer, in his role as SVP in charge of NBCU’s international unscripted group of companies. 

Before joining STV Studios, Barefaced TV was a label within Independent production group, Argonon. 

Chairman to leave

STV also announced that Baroness Ford will not seek re-election at next year’s AGM. Baroness Ford will have served for eight years as chairman at that point and, in line with planned succession, will retire from the board.

Chief executive Simon Pitts said:  “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.

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“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.

“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.”

Other highlights

Highest audience growth ever, +12%, with all time viewing share of 19.2%, and growth continuing post lockdown

Lockdown viewing +24%, with daytime +48% and STV News +40%

 STV still Scotland’s most popular peaktime channel, with 22.0% viewing share

Gap to BBC1 widening, gap to rest of ITV Network at an 18 year high

97% of commercial audiences of over 500k viewers in Scotland delivered by STV

Online viewing +86% and VOD stream starts +72%, with STV Player reaching 1 billion minutes viewed in half the time vs 2019

Successful digital content strategy sees 1,500 hours of STV Player-exclusive programming account for 30% of viewing in H1, and 5 of top 10 most popular digital shows

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