Power of television has hit home during pandemic, STV boss declares

THE chief executive of STV Group has declared television “reasserted itself” during the pandemic as the broadcaster returned to profit in the first half of the year.

Shares in the Glasgow-based company rose three per cent as it roared back into the black in the six months to June 30, driven by the rebounding advertising market and growing TV viewing figures.

STV also highlighted the growth of its online audience and “momentum” in its productions division over the period, which saw the group make a pre-tax profit of £8.5 million following a loss of £4.9m at the same stage last year. Revenue surged by 35% to £60.3m, and further growth is forecast for the rest of the year too. Total advertising revenue expected to increase by between 25% and 30% in the nine months to the end of September.

Chief executive Simon Pitts told The Herald: “We are very proud with how STV has responded over the last 18 months and the strength of our recovery has already taken us beyond 2019 levels of revenue and profit, to the point where we can say we are emerging from the pandemic stronger than ever.”

He added: “You can see from the speed of the recovery in the ad market that there has been a reappraisal of proven and trusted media in the last 12 months.”

Mr Pitts, who took over at STV in January 2018, highlighted that the channel has now enjoyed six consecutive years of viewing share growth. Viewing share was up 5% in the first half despite a tough comparison with last year, when TV audiences soared as people were stuck at home during lockdown.

Mr Pitts said that “audience numbers have been phenomenal” in the last 18 months and underlined the role played by public broadcasters in transmitting key information during the pandemic.

But he emphasised that the audience growth was broad-based. He flagged the impact on figures from Euro 2020, with the England versus Scotland match at Wembley in June delivering a record viewing figure of nearly two million for a football match on STV, as well as the popularity of dramas such as The Pembrokeshire Murders and Unforgotten.

In the second half, Mr Pitts said STV would be showing “three times more drama” this autumn compared with last year, with 50 hours of new network drama set to be screened. There will also be the return of the FA Cup to STV and the reality show I’m a Celebrity, Get Me Out of Here…! Next year the channel will be showing the football World Cup from Qatar.

Mr Pitts said the rise in audience numbers had not been down to a “lockdown effect”, noting: “The public service broadcasters have helped to bring the nation together to provide some respite and some escapism from what was going on. But also to provide much-needed facts and information about Covid and its effects in the community.

“In advertising terms, it has really reasserted its strength, I think.”

Mr Pitts highlighted the growth of the company’s productions division, STV Studios, which so far this year has secured 15 new commissions and eight new returnable series. Last year it secured 19 new commissions in total.

STV yesterday announced that it has taken an initial 25% stake in Brighton-based Hello Mary, an unscripted production company, which becomes the eighth label to join the STV family. Its productions include new dating pilot One Night Stand? which launched on E4 last week.

STV Studios has recently been filming Murder Island, an Ian Rankin-scripted murder mystery show, on Gigha. Mr Pitts said the acclaimed author has said the script for the show is his “twistiest” yet. The broadcaster has also just completed filming for prison drama Screw for Channel 4, which was shot in Glasgow.

STV expects revenue from productions to be in the region of £20m to £25m, which would be a “significant improvement on previous years – the busiest year we have ever had.”

Meanwhile, online viewing on the digital STV Player, which now offers more than 100 drama box sets, was up 66% in the first half.

Mulling the outlook for the rest of the year, Mr Pitts said: “The early indications for October are that advertising is in positive territory.

“It is too early to call the last two months of the year, but we expect the year as a whole to be up significantly and hopefully up on 2019, before the pandemic hit.”

The STV board proposed an interim dividend of 3.7p per share, 23% more than in 2020.

Shares closed up 10.7p at 348.2p.

The Herald Scotland

The Herald Scotland

The Herald is a Scottish broadsheet newspaper founded in 1783. The Herald is the longest running national newspaper in the world and is the eighth oldest daily paper in the world. The title was simplified from The Glasgow Herald in 1992