• Text size      
  • Send this article to a friend
  • Print this article

STV resumes dividend as it sees brighter times ahead

STV has said it is hopeful of increasing its dividend in the coming years after confirming its first payment to shareholders since 2006.

The media company said it felt comfortable in resuming dividends as its net debt had continued to shrink and the general economic outlook was becoming brighter.

The company reported a rise in revenue and profits for 2013 in spite of missing a number of internal key performance indicators (KPIs) in its digital and production divisions.

The Glasgow company said its total revenue grew 9% from £102.7m to £112.1m while pre-tax profits for 2013 were £15.2m, a 16% rise from the £13.1m posted for the previous year.

A further 21% was shaved off its net debt and that stood at £35.7m at December 31.

Chief executive Rob Woodward, who has been in place since 2007, said that meant the company's net debt to earnings before interest, tax, depreciation and amortisation (EBITDA) ratio was below two times for the first time since 1999. He hopes to further reduce that ratio to around 1.5 times by the end of 2014.

Mr Woodward said: "It is a good, robust set of numbers. Paying a dividend is a sign of the underlying health of our balance and sheet and the board's future outlook for the company."

A 2p per share dividend is proposed for 2013 with 3p per share targeted for 2014 with Mr Woodward keen for a progressive policy in the future.

Advertising revenue grew 6% during 2013 with STV predicting total airtime revenue for the first four months of 2014 to be somewhere between 7% and 8% ahead.

Mr Woodward indicated the price paid for advertising is now back at pre-recession levels and said: "We are cautiously optimistic about the market. The core television proposition has proved to be a very strong and resilient business."

Among the KPIs STV did not meet were its average number of digital unique users, video streams and digital revenue.

The company said its digital revenue, which includes online advertising and premium rate phonelines, increased by 15% from £6.5m to £7.5m but it had hoped to reach £11.5m.

Around a million videos are viewed on the STV Player each month and Mr Woodward confirmed the company remains on course to launch its local television service in Glasgow in June followed by a similar venture in Edinburgh later in the year.

Mr Woodward said: "The digital business is going extremely well. There is strong growth and it is highly profitable." Production revenue was up by 32% from £10.3m to £13.5m but lower than the £15m target STV had set.

Mr Woodward pointed out a number of recent commissions as well as a contract to make a quiz show called The Link for BBC1 which was announced yesterday.

He said: "We have been very consistent that we see great growth potential through STV Productions producing more shows for more broadcasters.

"The Link will be filming in Glasgow at Pacific Quay. Warner Brothers International are going to promote the format into the US market and act as our international distributor around the world."

Asked whether STV was going to make more feature length productions after the BAFTA Scotland success of Piper Alpha documentary Fire in the Night Mr Woodward said the announcement of another "landmark" documentary would be made shortly.

The company is also filming a drama pilot for ITV2 in Glasgow called Laid which is a remake of an Australian dark comedy series.

STV is not forecasting any significant uptick in revenue on the back of events such as the football World Cup, the Ryder Cup and the Commonwealth Games.

But Mr Woodward said: "The fact the eyes of the world will be firmly focused on Scotland through the course of 2014 has to provide a positive backdrop for  us."

Shares closed up 20p, or 5.9%, at 339p.

Contextual targeting label: 
Business

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis.
If you're a relatively new user then your comments will be reviewed before publication and if we know you well and trust you then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.

217588