Scottish television group SMG today shrugged off the tough advertising markets plaguing the media sector and said it was on track to hit full-year targets.

Scottish television group SMG today shrugged off the tough advertising markets plaguing the media sector and said it was on track to hit full-year targets.

The company's STV channel, which has four million viewers every week, saw strong growth in regional advertising offset weak national sales as it pushed operating profits up 26% to £4.9 million.

SMG has sold businesses such as Virgin Radio this year to focus on the television business and reduce debts. It also delivered £5 million in cost savings during the first half of the year.

The group's production business includes long-running detective series Taggart - now in its 25th year - cop show Rebus, and Jack Osbourne Adrenaline Junkie, which is made by Ginger Productions.

Chairman Richard Findlay said: "We remain confident of our ability to achieve the goals we set out and that our core television business will continue to move forward."

Despite ITV's reported downturn in national advertising revenues earlier this month, the firm said its targets remained unchanged for the rest of the year.

STV's national advertising revenues remained flat, and it is on course to boost its market share of the regional advertising market to 21% by the end of the year.

Chief executive Rob Woodward added: "SMG is now operationally lean, commercially focused and creatively successful. We are outperforming in difficult market conditions."

Including cinema advertising business Pearl & Dean and a six-month contribution from Virgin before its £53.2 million sale to Indian media firm TIML in June, SMG's overall operating profits slipped from £6.9 million to £5.4 million.

Virgin's operating profits were hit by increased costs and lower revenues, while SMG blamed factors such as weak film releases in the first four months of the year for widening losses at Pearl & Dean.

Royal Bank of Scotland analyst Simon Davis said: "SMG produced a good set of interims, with the benefits of its recent rationalisation programme coming through. This was a strong performance, against the backdrop of a circa-3% decline in national ITV1 advertising."