STV results to beat expectations
STV Group said it expected annual operating profit and net debt to be well ahead of expectations after regional and digital advertising rose strongly in the second half.
The Scottish broadcaster and TV programme maker also said former BT executive Paul Reynolds would be its next chairman.
Operating profit for the year to the end of December will be at least £18m, the maker of Taggart and Catchphrase said. Regional advertising rose 8% in the second half and was down 5% in all of 2020.
Video on demand advertising on the STV Player rose 11% in the second half and 12% for the full year, ending 2020 with four straight months of growth.
STV shares rose 13.3% to 340p at 10:32 GMT.
Total ad revenue was broadly flat in the fourth quarter compared with a 4% decline in the third quarter and a 38% plunge in the second quarter. Annual advertising revenue fell 10%.
Digital revenue growth, strong cash collection and management actions mean net debt at the end of 2020 will be less than £20m, significantly better than market expectations, STV said.
Simon Pitts, STV chief executive, said: "2020 finished strongly and we expect to report an operating profit and net debt position well ahead of market expectations, underscoring the resilience of our business, the loyalty of our viewers and our strong digital growth trajectory."
STV said its record viewing performance on TV and online continued. TV viewing ended 2020 up 14% and STV Player viewing rose 68%, the fastest growth of any broadcaster video on demand service in the UK, STV said.
Reynolds will join STV as chair-elect on 1 February and will take over board leadership from Margaret Ford at the April annual general meeting. Reynolds, who is Scottish, worked at BT for 24 years until 2007 and served as the boss of BT Wholesale and as an executive director. He is a non-executive director at TalkTalk and Computershare.
STV's senior independent director Simon Miller said: “Paul brings very significant public company experience, in both a non-executive and executive capacity, and his relevant TMT expertise, drive and personality made him the standout choice from a very strong field as the next chair of STV.”