By Kristy Dorsey

Shares in STV surged by almost 15 per cent yesterday after a second-half rally in Scottish and digital advertising led the broadcaster to predict that operating profits for 2020 will be “comfortably ahead” of previous market expectations.

The decline in total advertising revenue for the full year narrowed to -10%, half of that recorded in the first six months. From a crash of -38% in the second quarter of 2020, when lockdown restrictions to control the pandemic first came into place, total advertising revenue improved to -4% in the third quarter and then to “broadly flat” in the fourth quarter.

Operating profit for the full year will be “at least” £18 million, STV said, while the combination of digital revenue growth, strong cash collection and management actions to conserve cash mean that net debt will be “significantly better” than expectations at less than £20m.

READ MORE: Advertising recovery gathers steam as STV posts record growth in viewers

Chief executive Simon Pitts further highlighted the Glasgow-based company’s continued record viewing performance on television and online, with STV Player recording the fastest growth of any broadcaster video-on-demand service in the UK.

“We’ve set new viewing records on screen and online, with TV viewing up 14% and STV Player viewing up 68% in 2020,” he said.

Mr Pitts also noted that both the UK and Scottish governments have confirmed that television production can continue during the current lockdown, resulting in very little impact so far on the production schedule within STV Studios. Recent commissions have included a series on family farming for Channel 5, a new spin-off of its Catchphrase game show for ITV, and a six-part prison drama for Channel 4.

READ MORE: Scottish broadcaster boosted by advertising revival as lockdown eases

“Despite the ongoing challenges around Covid-19, we have managed to accelerate our strategy and remain confident in our prospects for growth,” Mr Pitts added. “We have a strong programme line-up in Q1 across STV and the STV Player, with more bingeworthy drama than ever before, while in STV Studios our slate of new commissions means that 2021 promises to be our most successful year yet.”

STV also announced two new appointments to its board of directors, including a replacement for outgoing chairwoman Margaret Ford, who is due to step down in April.

She will be succeeded by Paul Reynolds, a Glasgow native and former executive within BT. Aki Mandhar, former chief operating officer of Telegraph Media Group, has also been appointed as a non-executive at STV.

Shares in the company closed 43p higher yesterday at 338p.