(Alliance News) - STV Group PLC on Tuesday reported a rise in 2019 profit, but saw revenue struggle amid a tough national advertising market.
In 2019, the Glasgow-headquartered media company recorded GBP19.0 million pretax profit, sharply higher than the GBP1.9 million seen in 2018.
Adjusted operating profit, which excludes exceptional items, rose 12% to GBP22.6 million from GBP20.1 million.
Revenue was down 1.7% year-on-year in 2019 to GBP123.8 million from GBP125.9 million. Total advertising revenue, however, was up 1.6% to GBP101.6 million, reflecting strong gains in Digital and Regional, offsetting a drop in national ad buys.
STV declared a final ordinary dividend of 14.7 pence, giving a full year dividend of 21.0p, up 5.0% on the 20.0p distributed in 2018.
Chief Executive Simon Pitts said: "An operating profit increase when national advertising revenues are down illustrates our growing resilience and the exciting growth potential of our regional, digital and production businesses. In 2019 STV was the most popular peaktime channel in Scotland, ahead of BBC One for the first time in 6 years; our Growth Fund has now welcomed over 160 new advertisers to TV since launch, underpinning strong growth in regional revenues; and our digital streaming service STV Player launched on Sky and became universally available for the first time, helping to drive 37% growth in both streams and revenue. These factors contributed to a strong full year performance, with earnings per share also up 13% and operating margin up over 230 basis points to 18%."
STV's Broadcast unit saw revenue slip 2% year-on-year to GBP92.3 million, which the company blamed on the national advertising market. Digital revenue, however, was up 37% to GBP13.0 million.
STV Productions revenue dropped 16% to GBP13.7 million from GBP16.3 million.
STV said it has made a "strong" start to 2020, saying its viewing figures are up both online and its STV channel. Total advertising revenue is expected to rise year-on-year on the first quarter, but will fall 5% in April.
He added: "Despite uncertainty following the UK's exit from the EU and the Coronavirus, we are positive about the outlook for 2020. We have made a strong start to the year on screen and online, in line with our expectations, and have an exciting programming line-up to look forward to, with the return of Saturday Night Takeaway, Britain's Got Talent and new dramas like Liar and Quiz all helping to drive viewing on STV and the STV Player."
Looking towards the rest of 2020, STV expects single digit growth in regional advertising, strong double digit growth in Digital and expects STV Productions to move into profitability.
STV said the implications of the deadly coronavirus are "unclear" at this stage.
Shares in STV Group were 5.9% higher in London on Tuesday morning at 360.00 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com
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