Resilient revenues, a 45 per cent jump in operating profits and one-third rise in the interim dividend at STV shows a pretty plugged in television business currently.
STV’s digital arm continues to be an eye-catching turn, with revenues up 25 per cent in the six months to end-June, while the more traditional STV Productions business was no slouch, with revenues doubled and a strong pipeline for the second half.
Group debts are well down, while STV chief executive Rob Woodward says that he does not believe the UK’s European Union referendum vote will derail advertising. No advertisers have changed their bookings since the Brexit vote last June.
Woodward also says the increasing emphasis on high-margin digital activities does not herald the demise of so-called linear television.
He says that in Scotland the average STV viewer watches one hour and 40 minutes of traditional broadcast TV every day. It is the sixth consecutive year of underlying profits growth at STV, indicating, as its corporate slogan suggests, that it has the commercial and creative balance about right.
Phoenix set to rise again?
Lower-for-longer interest rates are bad news for Britain’s savers, but it could provide useful acquisition opportunities for Phoenix Group, the UK’s largest owner of life assurance funds that are closed to new customers. The intrinsic nature of the closed fund beast means that efficiencies are possible, but organic growth is not.
And the reduction of interest rates to new historic lows by the Bank of England to batten down the hatches before any economic rain has squeezed returns on investments for companies in the somewhat esoteric closed-funds sector.
Phoenix is known to be keen on buying profit-making businesses in the UK, perhaps partly to ease the ensuing integration process.
And its chief executive, Clive Bannister, is not pouring cold water on the speculation. “As the UK’s largest closed life consolidator you would be surprised if we didn’t engage in a wide range of discussions with multiple parties,” he says.
Translation: Phoenix is big, understands the mechanics of this insurance sub-sector and here if you need us. It could be a case of watch this space.