STV chief executive Rob Woodward yesterday hailed the firm’s return to full health as the Glasgow-based broadcaster unveiled plans to dole out dividends for the first time in seven years.
The group posted an increase in both revenues and profits during the first half, while also cutting its debts by nearly a quarter. It now plans to pay a full-year dividend of 1.5p per share early in 2014, its first since 2006, sending the stock up 6 per cent.
“It is a sign of the confidence that the board has in the underlying health of the business,” Woodward said. “The turnaround is in the past.”
Underlining the sense of a new beginning, Woodward thanked out-going chairman Richard Findlay “for his significant contribution in re-establishing STV”.
He added that he looked forward to delivering the next phase of the company’s growth strategy under the chairmanship of Baroness Margaret Ford.
“Margaret is joining us with a much more positive backdrop in place,” Woodward said. “She is excited about where we can take the company.”
STV – which broadcasts to more than four million TV viewers each month – saw a surge in work at its production arm as revenues jumped by 84 per cent.
Commissions include an additional ten episodes of comedy entertainment show Fake Reaction for ITV, while the BBC ordered a further 60 episodes of the long-running Antiques Road Trip.
STV Productions also delivered its first feature-length documentary, Fire in the Night, which was commissioned by BBC2 to mark the 25th anniversary of the Piper Alpha disaster and is based on the book of the same name by Scotsman journalist Stephen McGinty.
STV also announced a further commission for 12 episodes of Catchphrase, which was revived in April by ITV. Filming of the series, to again be hosted by Stephen Mulhern, begins next month.
The group as a whole increased pre-tax profit by 5 per cent to £6.7 million during the six months to 30 June, while revenues rose to £51.2m against £47.6m previously. Debts fell by 22 per cent to £43.4m, leaving the company on track to cut its borrowings to less than two times underlying profit by the year-end.
In broadcasting, STV saw a 4 per cent rise in national airtime revenues during the first half, with the cumulative figure for the third quarter expected to rise to 6 per cent. Woodward described the Scottish market as “more challenging”, with the regional airtime market down 6 per cent, though some improvement is expected in the coming months.
Broadcasting remains the primary driver of the business, but Woodward said STV was on course to hit its target of generating one-third of profits from non-broadcasting activities by 2015.
The overall performance was bolstered by a 19 per cent rise in digital revenues, with similar levels of growth expected in the second half.
Analysts at Numis Securities hailed the results as a “good set of numbers” following what has been an extensive road to recovery for STV.
The company had previously suffered from falling advertising revenues, as well as a lengthy legal battle that led the Glasgow-based group to drop a number of ITV drama series, such as Downton Abbey and Midsomer Murders. The dispute with ITV was settled in 2011, paving the way for STV’s return to profitability last year.