In May, Scottish broadcaster STV (STVG) unveiled a new strategy, putting digital activities "front and centre". That seems sensible as, once again, demand for digital content largely drove first-half revenue growth. The digital division reported a 24 per cent increase in sales following strong demand for online ad slots and a 73 per cent increase in viewership on the STV player.
That's not to overlook the achievements of the regional and national broadcast divisions, which reported higher advertising revenues despite a challenging marketing industry. Management credited this success to STV’s improved audience market share, up 13 per cent to 18.7 per cent in the period.
That reach could extend further in the second half thanks to a new partnership with Virgin Media. Meanwhile, investment into the digital platform and production business continues, using savings made from shutting secondary channel STV2. Lossmaking, it was shut down in May, and although this resulted in a £5.6m non-cash impairment (taking a bite out of reported profits), it should save around £1m a year.
Consensus broker expectations are for adjusted cash profits and EPS of £24.3m and 42.4p, respectively, in the year to December 2018 (2017: £21.5m and 36.8p)
| STV (STVG) | ||||
| ORD PRICE: | 400p | MARKET VALUE: | £ 157m | |
| TOUCH: | 398-407p | 12-MONTH HIGH / LOW: | 458p | 300p |
| DIVIDEND YIELD: | 4.5% | PE RATIO: | 133 | |
| NET ASSET VALUE: | * | NET DEBT: | £37.8m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 54.6 | 7.5 | 16.2 | 5.0 |
| 2018 | 57.7 | -4.3 | -10.9 | 6.0 |
| % change | +6 | -157 | -167 | +20 |
| Ex-div: | 20 Sep | |||
| Payment: | 31 Oct | |||
| *Negative shareholder funds | ||||
