Last checked at 22 Apr 2009 07:00
22 April 2009
STV Group plc
Chairman's AGM Statement and IMS
The following AGM Statement and trading update will be provided to shareholders by STV's Chairman Richard Findlay at the Company's Annual General Meeting, to be held at 10.30am today:
"As I stated at our Preliminary Results eight weeks ago, 2008 saw STV emerge as a transformed business with positive momentum. We delivered a strong performance in our KPIs in 2008 and they remain on track in 2009, with the previously highlighted exception of the broadcasting margin, which has been impacted by the market downturn.
Since 26 February, we have seen no improvement in the market outlook regarding our broadcasting division. We will therefore intensify our focus on efficiency improvements and cost reduction activities to effectively manage our cost base and mitigate any shortfalls in this unprecedented and challenging economic environment.
As part of this effort, I can announce today that STV's Leadership Team will be taking up to a 20% voluntary cut in salary from 1 May until the end of 2009 and will also be waiving their right to a performance related bonus in 2009. Rob Woodward, Chief Executive, and George Watt, Chief Financial Officer, will take reductions of 20% and 15% respectively. Other members of the Leadership Team will take reductions of between 10% and 15%. Whilst these salary and bonus costs have already been budgeted for, the Leadership Team is totally committed to the business and share a strong belief in the future of STV and a confidence that we will deliver our growth targets. We have identified a range of measures to mitigate the effects of the economic downturn and this additional decision will allow for increased investment in the business at this time.
The total television advertising market is forecast to be down around 20% in April and May, with STV and ITV1 trading slightly behind the market. The regional television advertising market has continued to be more volatile than the national market across the first five months and is forecast to be down 5% in April and down between 10-15% for May.
Under the direction of Alan Clements, our content team remains on track with its 2009 KPIs. We continue to invest in our content team, with a healthy number of projects in development. We are currently working with a number of other broadcasters on joint collaborations, and we remain optimistic about announcing future commissions in the near future.
Ventures is the main growth area of our business and we continue to develop and enhance our online portal. We are seeing early success with our classified business, which we launched in February, and the business is trading in line with pre-launch predictions. We are also seeing continued growth in user numbers and have recently launched a new bingo product, www.bingomood.com, designed to grow traffic and increase margins as well as online advertising revenue. We remain on track to meet our target of 90k visitors per day by the end of 2009.
The cinema advertising market is now forecast to be materially weaker than anticipated and this is impacting the performance of Pearl & Dean. We will sell the business at the earliest opportunity, and the loss-making contract we hold with Vue will end in 2010.
Also today, I would like to announce that we have appointed a new member to our Board - Michael Jackson, who will join us as a non-Executive Director on 1 May 2009. Mr Jackson has worked at the highest levels in the broadcasting and digital media industry in the UK and USA and he will be an excellent appointment to our Board. A separate more detailed announcement on this appointment has been issued to the Stock Exchange.
Despite this very challenging economic climate, we remain broadly on track with our KPIs, we have created a culture where cost-saving and entrepreneurial behaviour is in our DNA and have attracted strong leadership talent to our business. The further cost reduction measures taken by the Leadership Team announced today demonstrate the total commitment to shareholder value which characterises the coming together of your new Board and Leadership Team. We are committed to delivering for our shareholders and for our viewers, and to maintaining STV's position as Scotland's Broadcaster of Choice."
Enquiries:
STV Group plc
George Watt, Chief Financial Officer
Kirstin Stevenson, PR Manager 0141 300 3670
Brunswick Group
Simon Sporborg 020 7404 5959