By Scott Wright
STV boss Simon Pitts has declared the broadcaster is “feeling good” about its outlook after reporting its highest-ever revenue and operating profit.
Glasgow-based STV reported a profit before tax of £20.1 million on revenue of £144.5m for the year to December 31, with profits and turnover comfortably ahead not just of 2020, when its operations and the advertising market were blighted by lockdown, but its pre-pandemic levels of 2019. Operating profit was up 12% on 2019 at a record £25.2m.
The company highlighted the resurgence of the advertising market last year and ongoing momentum within its productions business, STV Studios, which saw turnover treble to nearly £27m amid a raft of new commissions, as it said revenue was 17 per cent higher than in 2019. Its results were underpinned by strong viewing figures, with the STV channel recording an all-time viewing share of 19.6%, its highest since 2008, and the continuing growth of its video on demand service, STV Player. Total online streams on the STV Player were up 63%, with online viewing up 42% and monthly active users up 54%.
Mr Pitts told The Herald that 2021 had been an “outstanding year” for the company, and noted that the momentum had continued into this year, as the company continues to secure new commissions for its productions unit, grow advertising revenue, and build its digital audience. STV expects advertising growth of 20% in the first quarter, including growth of 10% to 15% in April, and has secured 11 new commissions for its productions division so far this year.
“We are certainly ahead of where we thought we would be,” Mr Pitts told The Herald, as he reflected on progress made since pandemic started. “First of all, it is down to the strength of our combined audience across STV and STV Player. That is what has driven ad revenues to new heights in 2021 – our highest-ever total ad revenues.”
STV reported total advertising revenue of £112.6m for 2021, 24% up on last year and 11% ahead of 2019 – before the pandemic struck. Mr Pitts said the leap in advertising revenue against 2019 shows “this is much more than a Covid bounce-back, and it is STV-controlled advertising that is powering that performance”.
He said: “Local Scottish advertising was up 22% last year, 16% higher even than the pre-pandemic 2019 result, and digital VOD advertising on STV Player was up a further 38%.”
Mr Pitts noted last year’s viewing figures had been boosted by major events such as Six Nations Rugby and Euro 2020, which took place a year later than planned, and expressed excitement about the schedule on both STV and ITV for the year ahead. This year sees the return of heavyweight shows such as Ant & Dec’s Saturday Night Takeaway and Britain’s Got Talent, while in November and December the channels will be broadcasting 30 games from the 2022 football World Cup in Qatar. In total, Mr Pitts said STV will have over 150 hours of “new UK original drama”.
The company is on course to hit its three-year growth targets in 2023, which include doubling digital viewing, users and revenue to £20m, quadrupling studios revenue to £40m, and to achieve at least 50% of operating profit from outside traditional broadcasting.
“Overall we are in a strong position, our diversification strategy is really building momentum, and we are firmly on track to meet our ambitious 2023 targets,” Mr Pitts said.
STV announced yesterday that it added a ninth creative label to its productions stable, with the acquisition of a minority stake in Mighty Productions, founded by the creator and executive producer of Tipping Point, and the executive producer of The Weakest Link, Hugh Rycroft and Lynn Sutcliffe.
The company highlighted its concern over events in Ukraine, where Mr Pitts said that “any business implications obviously pale into insignificance against the humanitarian cost”.
He added: “STV has no exposure to trading with Russia and that will remain the case.”
The company declared a final dividend of 7.3pper share, taking the full-year dividend to 11p per share – up from 9p last year.
STV has been running an appeal on behalf of Ukraine for the Disasters Emergency Committee, which has so far raised around £10m in Scotland, and Mr Pitts said the company is exploring further ways it can help through the STV Children’s Appeal.
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