STV boss Simon Pitts said the company is benefiting from a reduction in reliance on traditional television and creating a “future-facing” media business.

Diversification of production and revenue streams is on track, with 38% of earnings now from digital and studios and helping to offset a 2% fall in total advertising revenue to £110m.

Profit before tax rose 11% to £22.2m from £20.1m for the year to the end of December on a 5% fall in revenue to £137,.8m from £144.5m.

The board proposes a final dividend of 7.4p per share for 2022, up 1% on 2021, giving a full year dividend of 11.3p per share, +3% on 2021.

Mr Pitts, chief executive, said: “2022 was another year of growth for STV where we delivered increased operating profit beyond our record performance in 2021.

“Our diversification strategy, focused on driving growth in digital streaming and content production, continues to accelerate, with digital profit up 9% and Studios profit up 6%. Nearly 40% of STV’s earnings now come from these new growth areas as we reduce our reliance on traditional television and create a vibrant, future-facing media business.

“Our audience position remains unrivalled, with STV being Scotland’s most popular peaktime TV channel for the 4^th year in a row and our viewing share the highest since 2009. 

“Streaming service STV Player had another record year, delivering growth against all key metrics and surpassing our target of 5m registered users in early 2023, one year early. 

“Our enhanced long-term partnership with ITV will propel the next phase of our streaming growth, guaranteeing exclusive access to 100+ hours of new, original UK content every year and complementing our extensive acquired content offering.

“STV Studios is scaling rapidly and profitably, winning a record 30 new commissions in 2022 and already securing over £50m in revenue for 2023. This will be a breakthrough year as we deliver three major new dramas for Apple, BBC and C4 and make meaningful progress towards our goal of becoming the UK’s leading nations & regions production company.

“The advertising market showed further resilience in 2022 with STV total advertising revenues finishing only 2% down on our record 2021 performance.

“As expected, given the uncertain economic climate and strong 2022 comparator, STV’s Q1 2023 total advertising is down by around 15%, though digital VOD advertising on STV Player is expected to be up around 20% and Scottish SME spend – excluding Scottish Government spend – also expected to be flat to slightly up, offering some encouragement for 2023.

“Our advertising performance should also be bolstered by a very strong content line-up which includes exclusive coverage of the men’s Rugby World Cup starting in September.”

Market reaction

Johnathan Barrett of Panmure Gordon said: “While the environment is tough, STV has continued to make progress and even grow profits modestly (+2.4%) when delivering a 4% beat.

“Looking forward 2023 won’t be easy from a macro perspective (and we do edge down forecasts), but the company is on track to achieve its key goals of growing its Digital and Studios businesses and driving diversification of revenues and profits. This is raising the quality of earnings and the potential growth rate.”