BROADCASTING and production company STV is set for a bullish increase in dividend payments following a 35 per cent rise in profits for the first half of this year.
The results, driven by a strong performance in the consumer business, have led the Glasgow-based group to double its planned interim dividend to 2p per share. This will be paid on 14 October and equals the whole of the dividend for 2013, STV’s first pay-out since 2006.
Chief executive Rob Woodward said this would be followed by a final dividend that is expected to be pegged at 4p, with further increases in the pipeline. “It reflects the financial health of the business,” Woodward said. “We have also guided to a further 33 per cent increase in 2015.”
The Glasgow-based company airs shows such as The X Factor and Coronation Street across Scotland, and also makes programmes like Antiques Road Trip and Catchphrase for other broadcasters. Pre-tax profits for the first half were up to £8.4 million on revenues which rose by 7 per cent to £54.7m.
The consumer business was strengthened by the World Cup, which bolstered national airtime revenues by 8 per cent.
Regional advertising was flat and is expected to be volatile in coming months, with revenues projected down 9 per cent in the third quarter followed by a 35 per cent surge in October.
On the whole, however, Woodward said broadcasting should go from strength to strength.
“The World Cup had a positive impact as you can see in our national numbers, but having said that our schedule as we head into the autumn months is very strong,” he said. “It is traditionally our strongest period of the year.” The group is capitalising upon what it describes as its “family” of services, which span five broadcasting and online outlets. Digital revenues were 16 per cent higher, with operating profits up 20 per cent to £500,000.
In contrast to other city television services which have struggled, local service STV Glasgow reached nearly 650,000 viewers in each of its first two months of broadcasting – 33 per cent of the available audience.
STV is the only incumbent broadcaster in the UK to be awarded a city licence, so it has a ready outlet for promoting the local service plus the benefit of existing relationships with advertisers.
Glasgow is expected to reach break-even by the end of this year, with STV Edinburgh due to launch in January.
The group’s production arm has been commissioned to film a further 40 episodes of The Link for BBC One, and deals to make Catchphrase, Lie and Celebrity Antiques Road Trip have also been renewed. A documentary for BBC One, Tutankhamun – The Boy Behind the Golden Mask, will also be made this autumn.
Woodward said the production arm was trailing its targets for the first half, but the timing of commissions meant it would reach its goal of £16.8m in revenues for the full year.