Production arm likely to lift STV
GROWTH in STV’s television production business is expected to compensate for a “flat” advertising market when the Glasgow-based broadcaster posts its half-year results on Wednesday.
House broker Peel Hunt expects the absence of a major football tournament to drive TV advertising revenues 3-4 per cent lower in the first six months, with no repeat of last year’s Euro 2012 boost.
But analysts at the brokerage said: “The group’s production businesses continue to perform well, with ITV2 recommissioning Fake Reaction after the BBC2 recommission of Celebrity Antiques Road Trip announced in February.”
Jane Anscombe, an analyst at Edison Investment Research, thinks STV will benefit from building up its library, including with Fire in the Night, the documentary about the Piper Alpha disaster based on Scotland on Sunday writer Stephen McGinty’s book, which she thinks will be a “valuable addition”.
But Anscombe added: “A key driver for strong profits growth would be to deliver one or more repeatable drama series – STV has yet to fully recover from ITV decommissioning the police drama Taggart in 2011, which had run for 28 years.”
Peel Hunt expects revenues will climb to £51 million in the six months to 30 June from £47.5m in the first half of 2012, while underlying profits will rise to £9.2m from £7.5m.