STV Upbeat Despite Profit and Turnover Drop

Despite a profit and revenue fall during the first half of this year – compared to this time last year – STV is saying it is “on track” to meet its key performance indicators.

According to interim financial results out this morning, the first half of this year saw a turnover of £41.5 million and an operating profit of £2.8 million. The figures for the first half of last year were £56 million and £4.9 million, respectively.

For the overall STV group – which includes the likes of Pearl & Dean cinema advertising – the turnover was £48.8 million and the operating profit was £2.2 million. And its pre-tax profit was down from £4.5 million to £700,000, not least because the group now, following its sale of Virgin Radio, is much different to what it was during the first hallf of last year.

Meanwhile, the group’s net debt was up – from £15.1 million on June 30 last year to £56.1 million on June 30 this year. Says a company statement, the increase is because of upfront payment of cinema rent, which will be partly recouped in the second half of the year, and pension deficit funding  contributions of £7.9 million. But the main element was a £30 million payback to shareholders.

These last twelve months has seen STV opt-out from broadcasting network programmes, such as The Bill, in preference for locally-made ones. They have also seen the demise of sports broadcaster, Setanta, which used to hire STV production facilities – including a floor of its four-floor Glasgow-based HQ. At the same time, it has struck a resources-sharing deal with BBC Scotland and secured, for the first-time, a commission from the BBC: Antiques Road Trip.

In addition, among other developments, is has launched an online recruitment ads service. It is also shut down its outside broadcast unit.

Among its key performance indicators is a target to produce 90 hours of TV for other broadcasters or co-productions. Two years ago, it produced 72 hours and last year it was 80 hours. STV says it is on track to hit the 90 mark this year.

In its statement, chief executive, Rob Woodward, says: “Despite market conditions, we are on track to achieve ten of our 12 KPI targets and have no plans to revise these for 2009 and beyond. STV is operationally lean, and we are developing a vibrant, diverse and relevant broadcasting schedule for Scotland. Combined with our growing digital business and a revitalised content team, this places us in a strong position to address the challenges of the advertising market and to deliver on expectations.”

Asked to what extent he was feeling bullish, Woodward told allmediascotland: “We are realistic. The results are absolutely in line with expectations. Everybody is commenting that the decline in the advertising market has been unprecedented and the impact on STV has been exactly the same as every other consumer-facing media company.”

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