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LONDON (Alliance News) - STV Group PLC said Wednesday it is creating a "comprehensive" three year strategy that will lead to a new organisational structure and 34 job losses.
The three divisions will be Broadcast, Digital and Production. Current director of channels, Bobby Hain, will become managing director of the Broadcast division whilst the recruitment process is underway to find the other two managing directors.
Due to the "challenging economics" of local television and "competition from BBC Scotland", loss-making channel STV 2 will close at the end of June 2018. This will result in annual savings of GBP1.0 million and 25 job losses.
The company has "launched a comprehensive change programme in news". It is currently recruiting for a new head of news to lead the transformation. The change will lead to savings of GBP1.0 million per year and 34 jobs being lost.
The Scottish media company will use redirected content spend to allocate GBP15 million for new investments over the next three years - most of which will be on "new original" content and digital.
Commercial terms have been agreed to sell STV's local television assets to That's Media. The agreement was not disclosed.
The Glasgow headquartered media company has agreed its first content partnership to "increase the scale" of STV Player. An ad-free subscription version of the current online player will launch to access pay revenues for the first time.
STV said its performance continues to be "strong across all areas". Its peak time viewing share from January to April was 22% - the best the company has had since 2009, which is three percentage points ahead of ITV's market share in the rest of the UK.
The company's national advertising revenue is expected to be up 2.0% in the first half of the year, with regional and digital advertising revenues expected to be up 20% to 25% in the same period - resulting in total advertising growth of 6.0% in the first half.
STV will incur the reorganisation costs of about GBP5.0 million. However, as a "sign of confidence" the company is proposing increased the full year dividend by a further 2.00 pence to 20.00p, an 18% increase on 2017.
Chief Executive Simon Pitts said: "This is a positive vision for STV that will re-establish the company as a creative force in Scotland and beyond. We will invest in creative talent, new original programming and digital to ensure STV becomes Scotland's home of news and entertainment and delivers long-term value for advertisers, shareholders and viewers alike.
"Our de-risked broadcast business is resilient and provides the engine room for STV's growth. We will use our unique marketing platform to showcase new formats from STV Productions, drive viewing to STV Player and get even closer to advertisers through the launch of our new Growth Fund for Scottish business.
"News is fundamental to the STV brand and we remain committed to offering the best news service in Scotland. However, given how quickly news consumption is changing it is vital that STV evolves to stay competitive, and we are therefore launching a comprehensive change programme - STV News 2020 - that will see us invest in skills, technology and digital as well as delivering cost savings."
Shares in STV were up 2.3% Wednesday to 350.20 pence each.