ITV's recent warning of falling TV advertising spend ensured that a similarly uninspiring outlook from STV (STVG) didn't take the market too much by surprise. Instead, investors took some comfort from a generous dividend rise, amid a fairly resilient performance from the Scottish broadcaster.
Key takeaways included a 19 per cent spike in regional airtime sales and promising video-on-demand growth. Heavy investment to reduce STV's reliance on cyclical advertising markets led the group's digital platform to register a 20 per cent surge in revenue. Management aims to increase the amount of earnings generated from its non-broadcast activities to 30 per cent by the end of next year, up from 23 per cent in the reported period.
Encouraging demand in the aforementioned areas helped to stop the bottom line from slipping. After stripping out another £2.8m goodwill write-off against the group's production arm, operating profit slid 3 per cent to £20m. Efforts to rein in programme costs also ensured that the previously documented decline of important national airtime revenue didn't have a more serious impact, while higher one-offs last year meant pre-tax profit pushed higher.
Broker Peel Hunt forecasts adjusted pre-tax profit of £19.6m in 2017, giving EPS of 40.8p (up from £18.5m and 39p in 2016).
| STV (STVG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 360.3p | MARKET VALUE: | £142m | |
| TOUCH: | 360.3-369.8p | 12-MONTH HIGH: | 450p | LOW: 300p |
| DIVIDEND YIELD: | 4.2% | PE RATIO: | 11 | |
| NET ASSET VALUE: | * | NET DEBT: | £26m | |
| Year to Dec 31 | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 103 | 6.4 | 13.0 | nil |
| 2013 | 112 | 14.3 | 32.2 | 2.0 |
| 2014 | 120 | 17.3 | 38.7 | 8.0 |
| 2015 | 117 | 9.8 | 29.8 | 10.0 |
| 2016 | 120 | 15.7 | 32.5 | 15.0 |
| % change | +3 | +60 | +9 | +50 |
Ex-div: 13 Apr Payment: 19 May *Negative shareholders' funds | ||||
