28/08/2008

Plans announced last year by the owners of stv, to increase the number of hours devoted to programmes made in-house and to encourage more people to its website, are ahead of target, according to the company’s latest figures.

This morning, SMG revealed its interim results to the Stock Exchange, revealing no change in revenue between the first half of this year and twelve months previously - at some £56 million - and an increase in operating profit, from £3.9 million to £4.9 million.

With the company having substantially reduced its debt - by 90 per cent, to £15.1 million - courtesy of sell-offs, such as Virgin Radio, for £53.2 million and a Rights Issue - it says it is “on track” to deliver on key performance indicators identified last year, with some actually being revised upwards.

The company - soon to be rebranded stv group plc - recently announced plans to return some £30 million - courtesy of the Virgin sale and also the sale of Primesight outdoor advertising - to its shareholders. One remaining ‘non-core’ business - cinema advertisers, Pearl & Dean - remains available for sale, and may be now more 'sellable', due to recent contract negotiations with at least one cinema chain as to how much it can expect to be paid as a minimum.

No dividend is being paid to shareholders this year.

In a statement, the company said: “SMG is a very different business from a year ago. We have transformed the group into an operationally lean, commercially focussed and creatively successful broadcasting business. We reduced debt and sold outdoor [advertising] and radio assets early in the cycle. We initiated a complete restructuring of the core TV business in March 2007, well ahead of media peers, and controllable costs to date have been reduced by over 20 per cent (£5 million) and net headcount by 23 per cent. We plan a further £1.5 million of annualised cost reduction by year-end.
 
“Clearly, the economic environment has become significantly more challenging during 2008. However, the execution of our growth strategy has provided strong resilience in this adverse climate. A combination of cost efficiency initiatives, designed to ‘de-risk’ the business, and successful growth in regional advertising, content and ventures means that we have been able to deliver on [first half-year] 2008 targets, and the board’s expectations for the full year remain unchanged. Similarly, we are on track to deliver all of our 2008 Key Performance Indicators (KPIs) and we have no cause to revise these targets for the second half.”

The key performance indicator set for this year in terms of programmes made in-house had been 60 hours (excluding news output). That figure has since been raised to 70 hours. And it has been set at 90 hours for next year and 130-plus for the following year.

In a fortnight’s time, new head of content, Alan Clements, takes up his post.

The company also says it is set to achieve its target regarding www.stv.tv - 30,000 visitors per day. The site is now home to a large body of archive and ‘watch again’ content - from both stv and ITV.

Added chair, Richard Findlay: “We have made great progress on our 2008 targets and despite challenging market conditions we remain confident of our ability to achieve the goals we set out and that our core television business will continue to move forward in line with our growth strategy.”
 
For more, read here.
 

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