STV sees tough few months ahead

Scottish digital media business STV posted a rise in profits but said it was cautious about the effect economic uncertainty would have on advertising.

The group, which holds the ITV licenses for central and northern Scotland, said pre-tax profit rose 8% to £7m on revenues that were up 1% to £47.6m.

A 15% increase in the group's effective tax rate resulted in earnings per share on an unadjusted pre-exceptionals basis dropping 10% to 16.0p.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

The firm said it was keeping the question of an interim dividend under review and would provide an update in February.

STV reported mixed results based on its key performance indicators, with peak time audiences and monthly page impressions ahead of targets, but digital revenues and production margins falling behind.

However, the firm said digital business growth had continued with 13% increase in revenue and increased traffic.

Over 60% of the company's broadcast audience now accesses STV online.

Chief Executive Rob Woodward said the immediate outlook for TV revenues was tough given continuing macro-economic uncertainty and the effect on the TV advertising market.

"STV national airtime revenue was down 1% in July and we expect August to be down 6% with September expected to be down 2%," he said.

"The regional airtime market remains challenging, reflecting the wider Scottish economy, and we expect the third quarter to be down 12% with regional revenues expected to be up 4% across the whole year."