STV writes down production arm after targets missed

Broadcaster STV today said it has written down the value of its production arm despite revealing a jump in revenues for the business.

STV chief Rob Woodward hailed a 'resilient' performance for the group's core business. Picture: John Devlin

The Glasgow-based group said STV Productions, maker of shows such as Celebrity Antiques Road Trip and Catchphrase, enjoyed a 53 per cent surge in revenues to £12.7 million for the year to the end of December, boosted by a new number of new business wins.

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But it said margins at the division had fallen well short of targets, prompting a writedown of £2.8m of the remaining goodwill.

STV said: “This follows a goodwill writedown of £5.1m on STV Productions in 2015 reflecting weaker profitability against internal targets over recent years, and increased risk of uncertainty against future targets.”

The move came as the group reported a “resilient” performance in its core business, with overall revenues up 3 per cent at £120.4m, although operating profits dipped 3 per cent to £19.7m amid a decline in national airtime revenues.

Chief executive Rob Woodward said: “We are continuing to de-risk the core business, placing the company in a strong position to deal with any weakness in the advertising market in the short to mid-term whilst relentlessly pursuing our growth objectives.

“Our digital activities are performing strongly with a margin of 52 per cent. These products enable us to extend our reach and impact through our family of consumer services.”

STV also said that shareholders were in line for a 50 per cent hike in their annual dividend to 15p a share, reflecting its “confidence in the underlying financial strength of the company, resilience of the core business and clarity of growth objectives.”