STV sets new viewing records with hit shows as profits push ahead of forecasts
Scottish broadcasting group STV has hailed a strong programme line-up for the opening quarter of 2021 as it flagged profits ahead of hopes.
In a trading update, the Glasgow-headquartered broadcaster said it expects operating profit for the year just past to be at least £18 million, “comfortably” ahead of market expectations, driven by a stronger-than-expected regional and digital performance.
STV-controlled advertising continued to outperform the wider advertising market, with regional advertising up 8 per cent in the second half and down just 5 per cent for the full year, delivering growth in five of the last six months of 2020.
The group’s record viewing performance on TV and online continued in the period, with TV viewing finishing 2020 up 14 per cent and the STV Player streaming service up 68 per cent – marking the fastest growth of any broadcaster video-on-demand service in the UK, bosses said.
The firm noted that both the UK and Scottish governments have confirmed that TV production can continue during the current lockdown, resulting in “very little impact” on its studio arm’s production schedule so far.
Chief executive Simon Pitts told investors: “2020 finished strongly and we expect to report an operating profit and net debt position well ahead of market expectations, underscoring the resilience of our business, the loyalty of our viewers and our strong digital growth trajectory.
“We’ve set new viewing records on screen and online, with TV viewing up 14 per cent and STV Player viewing up 68 per cent in 2020.
“STV-controlled Scottish advertising and digital advertising both continued their strong recovery in [the second half], driven by our advertising Growth Fund and the continued success of our streaming service, STV Player, which is now available in 70 per cent of the UK’s connected homes following recent launches on Freeview, Virgin and Sky.”
He added: “Despite the ongoing challenges around Covid-19, we have managed to accelerate our strategy and remain confident in our prospects for growth. 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.”
Roddy Davidson, research analyst at brokerage Shore Capital, said the update pointed to a “strong finish” to the year despite a “very challenging” period for the TV industry as whole. He noted that the operating profit figure flagged by the firm was ahead of his current forecast of £16.7m.
Davidson said: “We are very pleased to note the positive tone of [this] release and, as highlighted in our top picks report published last week, continue to view STV as a tightly managed, dynamic and entrepreneurial business with strong operational momentum and a clear growth strategy.
“It is particularly encouraging to see such a strong performance in the advertising categories that are under the company’s control – testament to the success of both the STV Growth Fund and its ambitious digital growth strategy.”
STV has also appointed Paul Reynolds as chairman elect and Aki Mandhar as a non-executive director.
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