STV 'coming through Covid with confidence' as streaming service surges

Scottish broadcasting group STV is “coming through the pandemic with confidence” after news of record audience growth helped offset a sharp fall in annual profits.

The Glasgow-headquartered group said its digital business continued to accelerate, with online viewing up 68 per cent and video-on-demand advertising 12 per cent higher in 2020.

The firm’s rebranded studios business maintained “positive momentum”, with a record 19 new commissions last year, including the largest single order yet placed by the BBC for delivery of four new series of Antiques Road Trip.

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Results for 2020 showed that revenues had fallen 14 per cent to £107.1 million with profit before tax down 65 per cent to £6.7m, compared with the year before.

Striking Out is among the best performing dramas on STV Player.

Total advertising revenue slid 10 per cent, though STV-controlled regional advertising was down just 5 per cent.

Digital revenues lifted 5 per cent, with video-on-demand revenues from the STV Player streaming service up 12 per cent.

Studios revenue fell 36 per cent, reflecting the pause in filming due to Covid restrictions during 2020, with the profit impact almost fully mitigated by strong secondary sales.

The group’s improving financial performance has seen it repay furlough grant funding amounting to £1.6m.

Chief executive Simon Pitts said the outlook was looking “more positive” after a “challenging” 2020. Updating on trading in 2021, he noted that STV channel viewing was up 14 per cent in the year to date, with STV Player viewing up 83 per cent and streams more than doubling.

The group also highlighted a strong upcoming programme schedule, including the delayed Euro 2020 football tournament.

Pitts said: “STV is coming through the pandemic with confidence. With profit and net debt materially better than expectations, the 2020 financial results… are testament to the strength of our business and the commitment and creativity of our people in what has been an extraordinary 12 months.

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“We enjoyed record audience growth in 2020, with TV viewing up 14 per cent and online viewing up 68 per cent, the biggest gains of any UK broadcaster, and were also able to accelerate delivery of our strategy.

“Our advertising Growth Fund enabled us to attract 91 new Scottish advertisers, we bolstered our successful digital content strategy with a further 1,200 hours of content, and we launched our streaming service STV Player across the UK for the first time meaning it is now available in over 17 million homes.

“STV Studios also secured 19 new programme commissions, the largest number ever, as it looks to establish itself as the UK’s leading nations and regions producer.”

The board has recommended a final dividend of 6p per share for 2020, giving a full-year cash equivalent dividend of 9p, up 43 per cent on 2019.

Roddy Davidson, media analyst at brokerage Shore Capital, said: “We are pleased to note the robust trading performance, impressive operational momentum, strengthened financial position and ambitious growth plans. All of which reinforces our conviction that STV is a very well-managed business with the potential to build on its dominant position in commercial TV broadcasting within Scotland and to deliver transformational growth within its digital and production divisions.”

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