An improved advertising backdrop and digital growth at STV (STVG) were offset by losses at the Scottish TV broadcaster's city channels and production unit. Investors reacted to the consequent 12 per cent slump in adjusted operating profits by sending the group's shares down 5 per cent.
Turnover crept up 2 per cent at STV's main consumer segment as modest growth in national advertising outweighed a 7 per cent decline in regional advertising sales. Moreover, digital sales surged 30 per cent to £2.8m as viewers flocked to the group's on-demand TV service, STV Player.
On the debit side, the company's new, city-focused channels in Glasgow and Edinburgh posted a combined loss of £0.8m, despite reaching an average of 0.9m viewers a month - over 30 per cent of their reachable audience. Meanwhile, production revenues more than halved to £1.7m. Yet that may reverse: most of the group's shows will be delivered in the second half, and the unit secured commissions from ITV, Sky and the BBC. It also struck a revenue-sharing deal with WPP-owned media investor GroupM to support and produce entertainment, documentary and drama projects. For example, the pair is producing a pilot called The Dressing Room - a look inside the changing rooms of sport teams.
Broker Numis expects pre-tax profit of £19m in 2015, giving EPS of 38.9p (2014: £17.3m and 37.6p).
| STV (STVG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 445p | MARKET VALUE: | £175m | |
| TOUCH: | 445-446p | 12-MONTH HIGH: | 490p | LOW: 322p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 15p* | NET DEBT: | £35m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 54.7 | 8.4 | 18.7 | 2.0 |
| 2015 | 53.6 | 6.8 | 13.7 | 3.0 |
| % change | -2 | -19 | -27 | +50 |
Ex-div: 10 Sep Payment: 9 Oct *Includes intangible assets of £9.9m, or 25p a share | ||||
