AGM Trading Update for Q1

Tagged in: RNS Announcements
Positive momentum in line with expectations
The following trading update will be provided to shareholders at the Company's Annual General Meeting to be held at 11am today.
Business performance continues in line with expectations and the guidance in the previous trading update of 28 February 2019. Trading to the end of May 2019 is expected to be as follows:
  • Total advertising revenue across national, regional and digital is expected to be up 1% to 2%, reflecting STV’s increasing resilience in the advertising market
  • Within that, we expect national advertising revenue to be ahead of previous guidance,  down 1% to 2%
  • Regional advertising is continuing to perform strongly, up 20% to 25% driven by the on-going success of the STV Growth Fund which has now partnered with more than 130 Scottish advertisers, over half of whom are new to TV
  • Digital revenues are also expected to be up 15% to 20% reflecting continued strong growth from the STV Player
  • STV’s Production business continues to perform in line with expectations with revenues secured by end of Q1 now equivalent to over 60% of the total achieved in 2018.
Advertising revenue performance is underpinned by a strong viewing performance, with STV peak time viewing share in Q1 2019 in line with last year’s very strong Q1 and all time viewing share up a further 4%.  STV’s 2018 viewing performance was its best in a decade and this strong performance has continued in Q1 2019 with share gains across all key demographics.
STV Player continues to grow strongly, with online viewing up 20% and streams up 28% in Q1 driven by hit dramas like Manhunt, Cheat and The Bay.
Production had secured over 60% of its 2018 revenues by the end of Q1 2019, including a number of re-commissioned series.  This includes the BBC re-commissioning series 19 and 20 of ratings success Antiques Road Trip and a further series (series 9) of Celebrity Antiques Road Trip, both for delivery in 2019. 
During the period, STV Productions’ first ever drama commission for the BBC, The Victim, aired in peak time on BBC1 to widespread critical and popular acclaim, with episode 1 consolidating to over 6.5 million viewers so far. Production of a second drama commission for BBC1, Elizabeth is Missing, will commence in July.
Investment in key creative talent has continued during the period. Following his appointment as Managing Director of STV Productions in November, David Mortimer has appointed well respected producer and commissioner Craig Hunter to the key position of Creative Director, Factual. Craig’s most recent commissioning successes include Blue Planet Live and Inside the Factory and he has worked across a huge range of formats and returning series. Based in Scotland, Craig’s extensive experience of production in the Nations will support the strategy to deliver production out of Scotland for both UK and international broadcasters. His appointment completes a very strong senior creative team alongside Sarah Brown, Creative Director, Drama, and Gary Chippington, Creative Director, Entertainment.
As announced last week, agreement has been reached with the trustees of the Company’s two defined benefit pension schemes on a deficit funding plan following the 2018 triennial valuation.  This new twelve year recovery plan will fund a pre-tax deficit of £127m as at 28 February 2019 and, significantly, will result in both schemes reaching a funding level of self sufficiency by the end of the recovery period.
The funding plan is based on annual funding payments equivalent to the previous recovery plan with the 2019 payment of £9.0m increasing annually at 2% per annum until October 2030.
Board changes
It is confirmed that Lindsay Dixon will take up her appointment as Chief Financial Officer on 21 May 2019.  George Watt will step down from the Board today and leave the company on 30 April 2019 to pursue a non-executive career following over 20 years with the Company.
Simon Pitts, Chief Executive Officer, said:
"We have made a strong start to 2019, with TV and online viewing levels continuing their positive momentum from 2018 and total advertising revenue also growing, demonstrating STV’s increasing resilience in the advertising market even in an uncertain economic climate.
“Our STV Growth Fund goes from strength to strength, underpinning strong regional advertising sales and bringing new advertisers to television for the first time.
“We are immensely proud of our new Scottish drama series – The Victim – which aired on BBC1 earlier this month to huge critical and popular acclaim and represents just the sort of landmark programming we want to do more of in future.”
“We also look forward to welcoming Lindsay Dixon as Chief Financial Officer in May and wish George Watt every success following a stellar 20 year career at STV.”
Katie Martin, Communications Executive
Tel: 0141 300 3109
Anna Hendry, PR Executive
Tel: 0141 300 3830
Geoffrey Pelham-Lane, Partner / Ben Woodford, Partner
Tel: 0203 757 4985