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LONDON (Alliance News) - Broadcaster STV Group PLC Thursday posted a fall in pretax profit for its first half, although it raised its interim dividend and said it has entered into a development partnership with GroupM Entertainment, part of WPP PLC.
The two companies will co-invest, co-develop and co-produce media ideas across a range of creative genres, the company said. No financial details of the arrangement were disclosed.
STV proposed an interim dividend of 3.0 pence, up from 2.0 pence, and plans to pay a final dividend of 7.0 pence, taking its total dividend for 2015 to 10 pence, up from the 8.0 pence it paid for 2014. The company re-instated dividend payments last year with a progressive dividend policy.
For the half year to end-June the company reported a pretax profit of GBP6.8 million, down from GBP8.4 million a year before, as revenue declined to GBP53.6 million from GBP54.7 million, and operating expenses rose to GBP46.0 million from GBP44.9 million.
The fall in revenue came from a decline in the company's STV Productions segment, which it attributed to a second half weighting for the segment, which offset a rise in Consumer business revenues and strong growth digital revenues.
Additionally, the company reported initial loss of GBP800,000 associated with its new STV Glasgow business, which it said remains on track to breakeven by the year end. It also made a provision of GBP1.0 million against the carrying value of its investment in Mirriad Ltd.
Mirriad failed to complete an important fundraising round in April and needed immediate funding to continue trading, STV said, and STV supported a rescue of the business with GBP200,000 of new investment as part of a wider funding package.
"Today's results are in line with expectations at the half year and represent another milestone on our route to achieving our strategic ambitions and KPI growth targets for the end of 2016. We are continuing to create sustainable growth and increased consumer margins, resulting in a rebalancing of the business through the growth of our profitable non broadcast services. Confirmation of the enhanced dividend payment reflects the board's confidence in our ability to deliver against our strategic plans," said Chief Executive Officer Rob Woodward in a statement.
Shares in STV were down 1.7% at 459.40 pence Thursday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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