STV ‘well-placed’ to bounce back when lockdown measures loosened

Bumper viewing figures for STV during lockdown bode well for the Scottish broadcaster when the measures are relaxed, according to a City analyst.

STV chief executive Simon Pitts flagged record audiences.

Although broadcasters have been hit hard by a slump in advertising, Roddy Davidson at Shore Capital believes Glasgow-headquartered STV is well-placed to benefit when conditions improve.

He pointed out that STV – led by chief executive Simon Pitts – recently flagged that both its channel and the on-demand STV Player service are achieving record audiences.

Viewing via the STV Player increased by 80 per cent and new content including boxsets is being added to support growing demand.

Davidson said STV has also been proactive in protecting profitability and conserving cash during the pandemic with measures including voluntary management salary reductions and dividend suspension. He said the business was “well-placed for better times”.

“We rate STV as a well-managed, entrepreneurial business with strong operational momentum and a clear strategy for accelerating growth and capitalising on its dominance of the Scottish commercial TV market. We also expect brands to turn to TV to reenergise sales when lockdown measures are relaxed,” he said.

Shore’s updated financial forecasts for the group assume an 18 per cent decline in advertising revenues this year, compared to previous estimates of a 4 per cent drop. It also predicts a flat year for the digital division compared to the 15 per cent growth previously pencilled in.

Shares in the company are down by more than a third on levels seen at the beginning of the year, but Shore believes the fall has been overdone and has reinstated its “buy” recommendation.

A message from the Editor:

Thank you for reading this story on our website. While I have your attention, I also have an important request to make of you.

With the coronavirus lockdown having a major impact on many of our advertisers - and consequently the revenue we receive - we are more reliant than ever on you taking out a digital subscription.

Subscribe to scotsman.com and enjoy unlimited access to Scottish news and information online and on our app. With a digital subscription, you can read more than 5 articles, see fewer ads, enjoy faster load times, and get access to exclusive newsletters and content. Visit https://www.scotsman.com/subscriptions now to sign up.

Our journalism costs money and we rely on advertising, print and digital revenues to help to support them. By supporting us, we are able to support you in providing trusted, fact-checked content for this website.

Joy Yates

Editorial Director