It’s perhaps unusual to take solace in a 5 per cent dip in revenues, but STV's (STVG) top line reflected encouraging trends, not least of which a relatively modest 0.6 per cent decline in advertising sales, which meant that the Scottish broadcaster outperformed the overall TV market in the six months to June.
Chief executive Simon Pitts notes ITV (ITV), an effective benchmark for the group, endured a 5 per cent fall in advertising revenues. And while STV did endure lower national advertising income – down 6 per cent – this was mitigated by a 19 per cent improvement in both digital and regional advertising. For the nine months to September, the group expects national advertising sales to fall by 6-7 per cent, dampened by Brexit uncertainty, but growth elsewhere should result in a broadly flat position overall.
Revenues for STV Productions fell by almost a half to £2m, with operating losses of £1.7m (from comparative losses of £1.2m). This stemmed from the phasing of programmes, and should “substantially reverse” in the second half when previously commissioned series are delivered.
Overall, adjusted operating profits landed at £10m, up by a tenth and slightly ahead of Peel Hunt’s estimate. The broker is guiding for adjusted EPS of 45.7p for 2019, up from 40.3p in 2018.
| STV (STVG) | ||||
| ORD PRICE: | 355p | MARKET VALUE: | £139m | |
| TOUCH: | 355-371p | 12-MONTH HIGH: | 410p | LOW: 318p |
| DIVIDEND YIELD: | 5.7% | PE RATIO: | 10 | |
| NET ASSET VALUE: | * | NET DEBT: | £42m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 57.7 | -4.3 | -10.9 | 6.0 |
| 2019 | 54.9 | 9.1 | 19.7 | 6.3 |
| % change | -5 | - | - | +5 |
| Ex-div: | 26 Sep | |||
| Payment: | 06 Nov | |||
| *Negative shareholders' equity | ||||
