STV losses hide underlying solidity

SCOTTISH broadcaster STV turned in a solid underlying performance in 2011, but the cost of settling a long-running legal battle with ITV pushed the company into a bottom-line loss.

Litigation expenses of £13.5 million and £1.4m for newsroom redundancies resulted in a pre-tax loss of £900,000 for the year to the end of December, against a profit of £3.9m previously.

Stripping out those exceptionals, Glasgow-based STV posted a 12 per cent rise in profits to £14m on turnover of £102m.

Chief executive Rob Woodward said the figures represented a “strong result” amid continuing market difficulties. Revenues from national advertising fell 3 per cent during the year, while regional advertising was down 13 per cent.

STV anticipates a 4 per cent decline in total airtime revenues in the first quarter of this year, with a 14 per cent rise in regional sales only partly offsetting an 8 per cent decline nationally. The company wants to increase non-broadcast revenue from 11 per cent to 33 per cent of total earnings by 2015.

However, the production arm missed its targets for the year as revenues fell 14 per cent to £8.4m after losing the ITV commission for long-running police drama Taggart.

Despite that setback, Woodward said the group remained on course to raise external production to 140 hours of programming, up from 121 hours last year.

This will be partly driven by a new two-year deal to produce 120 episodes of Antiques Road Trip for the BBC.