By Scott Wright
STV chief executive Simon Pitts has declared the resilience shown by the broadcaster amid Brexit uncertainty under his stewardship gives it the confidence to believe it can overcome the coronavirus threat.
The comments from the former ITV executive came as STV unveiled a 13 per cent rise in underlying operating profit to £22.6 million – its highest in more than a decade. Mr Pitts, who joined STV in January 2018, said the growth of regional advertising and its digital operations helped it offset the decline in national advertising last year.
The Glasgow-based firm expects to achieve further growth in regional advertising and digital revenue in 2020, noting that the impact of coronavirus is “unclear at this stage”. Asked what the implications would be if the European Championships were to be postponed, Mr Pitts replied: “June is still quite far away, and the situation is rapidly changing. It is a bit too soon to speculate on that.”
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Noting that the priority is to ensure the well-being of staff and “focusing on things that are in our control”, Mr Pitts said: “We do have a very clear strategic plan that has been tested to the hilt over the last two years in a market that has endured Brexit and all the uncertainty that has come with that.
"Despite that, we have delivered 13% growth last year, a cumulative 20% growth in profits since we announced our plan, and with that backdrop in mind there is no reason why we can’t continue to grow in this climate.”
He added: “There is no immediate impact on STV’s operations [from coronavirus]. We haven’t seen any cancellations from advertiser clients, and we do have robust contingency plans in place. The majority of our staff can work flexibly – you would be very surprised to hear that these days a TV channel can virtually run itself without people in the control room.”
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STV reported a 2% rise in total advertising revenue to £101.6m, driven by a 37% rise in digital revenues to £13m and growth of 11% in regional advertising to £14.9m. Digital contributed £2.1m of additional profit.
Asked why regional advertising has been able to buck the national trend, Mr Pitts pointed to the strength of STV’s programming, which helped it maintain its viewing share at an all-time high of 17.7%, and the STV Growth Fund, which he said has now introduced 160 businesses in Scotland to television advertising since its launch.
Mr Pitts also underlined the progress of STV Productions, which made two critically acclaimed dramas for BBC last year, The Victim and Elizabeth is Missing. He said the division has a “much healthier slate of new and returning shows”, which include factual and entertainment formats as well as drama.
Earlier this year STV Productions won its biggest recommission to date from the BBC from Antiques Road Trip and Celebrity Antiques Road Trip, with 140 episodes to be delivered over two years. It has secured commissions for two factual entertainment series for Discovery and two new commissions for Primal Media, including Home Free, for Channel Four.
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While revenue from STV Productions dipped to £13.7m last year from £16.3m in 2018 as it was repositioned under a new management team, the company said it will move back into profit this year. Mr Pitts said: “We have strong foundations.”
Meanwhile, STV Player saw a 17% rise in registrations last year to 3.5 million, the equivalent of 80% of Scottish adults. The company sees strong growth potential for the service, which is now available on Sky and Apple TV.
There are now more than 1,000 hours of “player-exclusive” content available on the player, including drama box sets, crime series and sport, which STV said now constitutes more than 20% of its digital viewing.
STV proposed a final dividend of 14.7p per share, giving a full-year pay-out of 21p per share, up 5% .
Shares in the broadcaster recovered some of their poise amid the stock market bloodbath this week, and closed up 6.8% at 363p.
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