STV: A GROWTH COMPANY
STV is successfully executing a diversification strategy which is on track to deliver against clear 3-year targets to the end of 2023. We will:
Grow STV-controlled broadcast revenues to £20m
Double digital viewing, users and advertising revenue (to £20m)
Quadruple production revenue (to £40m)
Achieve at least 50% of operating profit from outside traditional broadcasting
We are delivering sustained strategic progress with clear evidence of a strong growth trajectory over the past four years.
THE LAST 4 YEARS HAVE SEEN SUSTAINED STRATEGIC PROGRESS
A STRATEGY FOR SUCCESS - EXCEEDING GROWTH TARGETS
Following clear progress since the introduction of our growth plan, 2021 was an outstanding, record year of growth for STV Group:
- A record financial performance – our highest revenue, highest adjusted operating profit and lowest net debt on record.
- Strong EPS growth
- Excellent cash generation, strengthening our balance sheet and driving a net cash position for the first time.
- A record advertising year via our unrivalled audience position, with ad revenues up 24% on 2020 and up 11% on 2019.
- Strong growth in our high margin digital business. We have a distinct streaming proposition in an AVOD market set to grow very quickly over the coming years.
- A positive profit contribution from STV Studios, having trebled its revenues in 2021, with exciting profit growth projected in a fast-growing, global market for high quality content.
In June 2022, we provided updated guidance on STV Studios, advising that this division will exceed its stated 3-year target to more than quadruple production revenues to £40m by the end of 2023 compared to the baseline year of 2020 (£8.7m). Over £20m of Studios revenue has already been secured for 2022 and £40-45m for 2023. STV Studios' adjusted operating profit is expected to be at least £3m in 2023, more than double the level of 2021.
MEDIA SECTOR TRENDS PROVIDING GROWTH OPPORTUNITIES
The fundamentals of our business have been strongly reinforced by the accelerating trends we have seen in the fast-moving media sector over the past two years.
- The huge audience appetite for high quality, local video content from trusted brands
- The unprecedented speed of the recovery in video advertising following the pandemic
- The rapid adoption of digital streaming amongst our core audiences, and
- The surging demand for new, original commissions from across the UK from the big networks and the global streamers
These trends give STV real opportunity to continue to power our growth strategy and the ongoing transformation of our business into a fully diversified media company, led by digital streaming and ownership of globally valuable content.