By Kristy Dorsey
Scottish broadcaster STV has joined the swelling ranks of listed firms to axe its dividend payment in a bid to conserve cash amid the coronavirus crisis.
The Glasgow-headquartered group said its proposed final dividend of 14.7p per share – announced earlier this month along with a surge in profits for the 2019 financial year – will no longer be paid. This will amount to a saving of £5.5 million.
Together with other measures such as delayed capital expenditure and a reduction in programming costs, STV said it will retain at least an additional £10m of cash within the business in the short to medium-term.
The broadcaster, which holds the Channel 3 licence in Scotland, has benefitted from a rise in viewing figures amid the pandemic, with a 45% increase in peak time audience last week. This included a 22% rise in daytime viewing and a 48% surge in audiences for STV News.
However, this is not expected to be matched by higher revenues. The downturn in advertising will make the group’s previous target of single-digit percentage revenue growth in the current year “challenging”.
The effects of this will be partially mitigated by STV’s variable cost base, as set up in its long-term arrangement with ITV. Under this agreement, programming costs will fall in line with the decline in national ad revenue, thus protecting margins.
Online viewing is up by 80% so far this year, with more than eight million hours of on-demand viewing through the STV Player. However, digital revenues will not be immune to the advertising downturn, meaning that guidance of strong double-digit percentage growth “will likely come under pressure” in the coming weeks.
Chief executive Simon Pitts said the group’s immediate focus is on protecting its people and continuing to fulfil STV’s public service role to inform and entertain viewers in “the most trying of circumstances”.
The company has set up a new initiative, STV Local Lifeline, which will initially provide £1m of free advertising to charities and small local businesses during the crisis. This will be financed through the group’s existing £20m Growth Fund designed to reduce the cost of local airtime for Scottish advertisers.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here