Scottish broadcaster STV (STVG) starts 2013 on a far firmer footing than it has been on for a number of years. The group has secured a recommendation for a 10-year license renewal for running Channel 3 and net debt has fallen from 3.1 times cash profits to a more palatable 2.3 times. There was also a strong performance from production, with revenue up 21 per cent to £10.2m, and an impressive 84 per cent rise in revenues from growth categories in digital.
But STV is not without its issues. Digital revenues overall fell £2.6m short of the £9.1m target and the tough economic backdrop will create a drag on broadcast revenues. What's more, advertising, which has started the year strongly, will not get the boost from the flotilla of national events that buoyed 2012.
Meanwhile, higher interest charges on a new loan arrangement almost entirely wiped out the benefit of a 14 per cent rise in operating profit on adjusted EPS, which edged up 1 per cent to 32.5p and was below consensus forecasts of 34p. This year, the replacement of 2012’s £1.3m non-cash pension credit with a £1.1m charge will hit the numbers, prompting broker Numis to lower pre-tax profits forecasts by £1m to £13.5m, giving EPS of 27.7p (2012: £14.4m and 31.3p).
| STV (STVG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 146p | MARKET VALUE: | £57m | |
| TOUCH: | 143-148p | 12-MONTH HIGH: | 146p | LOW: 81.5p |
| DIVIDEND YIELD: | nil | PE RATIO: | 8 | |
| NET ASSET VALUE: | * | NET DEBT: | £45.3m | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 111 | 4.9 | 3.6 | nil |
| 2009 | 90 | 6.1 | 12.3 | nil |
| 2010 | 105 | 3.9 | 14.6 | nil |
| 2011 | 102 | -0.9 | 1.6 | nil |
| 2012 | 103 | 9.1 | 18.3 | nil |
| % change | +1 | - | ||
*Negative shareholder funds | ||||
