Stvg Regulatory News (STVG)

7am, 16 November 2011

STV Group plc

Interim Management Statement - Quarter 3

STV Group plc today releases its Interim Management Statement covering the period from 25 August 2011 to 15 November 2011. The Group has continued to make good progress in the period:

·; STV's digital business continues to develop with all usage metrics growing in line with KPI targets. The roll out of the STV Local network of hyper-local sites continues with Glasgow set to launch in early 2012;

·; STV Productions continues to broaden its activities across genres and this month has announced a key commission from ITV2, Perez Hilton Super Fan, a co-production borne out of our strategic partnership with US production company Kinetic Content and GroupM Entertainment;

·; Launch of new regional news programmes for Edinburgh and the East of Scotland and for Glasgow and the West of Scotland, making STV's news service the most local in the UK. Since launch, STV's news audience has increased by 17%;

·; Ongoing strong cost management offsetting impact of macro-economic downturn on revenues.

In Q3 national advertising revenues were down 4%, a slight improvement against expectations. National advertising revenues in November and December are expected to be slightly below the ITV Network due to very high revenue shares in the previous year. Overall, we expect national revenues to be down 2% to 3% for the full year.

Regional airtime revenue was in line with expectations in Q3, down 18%, and has returned to growth in Q4. The rate of growth has slowed due to the impact of the macro-economic climate and will not be as strong as previously expected in H2, with regional airtime revenue for the full year now expected to be down 10%. The impact of reduced national and regional airtime revenues will be almost fully offset by cost savings delivered from across the Group.

We remain cautious on the outlook for 2012 but are encouraged by our strong on-screen performance where we continue to outperform the broader ITV Network and the positive impact of Euro 2012 next summer.

STV will host an event for analysts at 12pm today and there will be no further trading information disclosed.

Rob Woodward, Chief Executive Officer of STV Group plc, said: "We are broadly on track to deliver our targets and our strategy remains clear going forward with investment in strategic partnerships, helping extend the STV brand in our core Scottish market and beyond. We are committed to delivering public service broadcasting and creative content across all platforms and to delivering shareholder value. This is an exciting time for STV, with a number of strategic initiatives underway and a true connection with our audience, we are confident in our position as Scotland's leading digital media company."