STV Group plc today announces that it expects operating profit for the year ended 31 December 2020 to be at least £18m, comfortably ahead of market expectations, driven by a stronger-than-expected regional and digital performance.
STV-controlled advertising continued to out-perform the wider advertising market, with regional advertising up eight per cent in H2 and down just five per cent for the full year, delivering growth in five of the last six months of 2020.
Video on Demand advertising on the STV Player continued its strong growth, up 11 per cent in H2 and +12 per cent for the full year, finishing 2020 with four consecutive months of growth.
STV’s total advertising revenue improved to broadly flat in Q4, with November -1 per cent and December +3 per cent. This followed a Q3 of -4 per cent and Q2 of -38 per cent. The decline in total advertising revenue for the full year has narrowed to -10 per cent.
The combination of digital revenue growth, strong cash collection and management actions will result in the company reporting a net debt position significantly better than current market expectations, and less than £20m.
STV’s record viewing performance on TV and online continued, with TV viewing finishing 2020 up 14 per cent and STV Player up 68 per cent, the fastest growth of any broadcaster VOD service in the UK.
The UK and Scottish governments have confirmed that TV production can continue during the current lockdown, resulting in very little impact on STV Studios’ production schedule so far, with Covid safety protocols continuing to work well.
Simon Pitts, STV chief executive, said: “2020 finished strongly and we expect to report an operating profit and net debt position well ahead of market expectations, underscoring the resilience of our business, the loyalty of our viewers and our strong digital growth trajectory.
“We’ve set new viewing records on screen and online, with TV viewing up 14 per cent and STV Player viewing up 68 per cent in 2020. STV-controlled Scottish advertising and digital advertising both continued their strong recovery in H2, driven by our advertising Growth Fund and the continued success of our streaming service, STV Player, which is now available in 70 per cent of the UK’s connected homes following recent launches on Freeview, Virgin and Sky.
“Despite the ongoing challenges around Covid-19, we have managed to accelerate our strategy and remain confident in our prospects for growth. We have a strong programme line-up in Q1 across STV and the STV Player, with more binge-worthy drama than ever before, while in STV Studios our slate of new commissions means that 2021 promises to be our most successful year yet.”
This announcement constitutes inside information for the purposes of article seven of the Market Abuse Regulation (EU) No 596/2014.
Meanwhile, STV Group plc is delighted to announce two new non-executive appointments to the board, effective from 1st February 2021. Paul Reynolds is appointed as non-executive director and chair-elect and will succeed Baroness Margaret Ford as chair when she steps down from the board as planned at the April 2021 AGM. Aki Mandhar is also appointed as non-executive director.
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