Divi booster from STV amid pressure on advertising

● Shareholder payout up 13% as buybacks continue ● Scottish broadcaster’s ad revenues down 7%

A weaker national advertising revenue market has hit turnover and profits at STV – but the broadcaster cheered investors yesterday with a 13 per cent hike in the dividend saying it was upbeat about the resilience of its core business.

STV chair Margaret Ford said “macro economic uncertainty” had weighed down on the advertising revenue market in 2017, with the company suffering a 7 per cent fall.

Total group revenues fell 3 per cent in the year to £117 million from £120.4m, although its consumer division saw profit margins firm to 18.7 per cent.

Operating profits dropped 4 per cent to £19m, while bottom-line pre-tax profits were down 11 per cent at £13.9m. That compared with £15.7m in 2016, with the Brexit vote happening in June that year.

New STV boss Simon Pitts, who joined the company in January, said: “The results announced today are broadly in line with expectations, reflecting a weak 2017 advertising market and ongoing UK macro-economic uncertainty.

“Despite this, the resilience of our broadcast business has ensured a solid performance and a higher margin. In addition our digital business has continued to deliver profitable growth, at a margin of 55 per cent.”

Pitts, who said he has used his first two months at the helm “to assess performance and develop plans for growth”, added: “2018 has started strongly across all parts of the business, with both national and regional advertising expected to be up in the first quarter.

“We’re also delivering good growth in digital driven by increased viewing on the STV Player, and STV Productions has already secured 10 new commissions in 2018, including a number of returning and returnable series.”

STV’S digital revenues lifted 14 per cent to £8.4m. The company said that its data and insights arm had 2.5m hits, “with more than 60 per cent of the Scottish population now registered users of STV services, significantly ahead of all other UK broadcasters”.

The company said STV Productions was also “back in the high end drama business” with the commission of the BBC1 drama series, The Victim.

STV declared a final dividend of 12p per share, giving a full-year payout of 17p compared with 15p in the previous year. Ford also confirmed the announcement in August that the group will return an additional £10m to group shareholders through share buybacks within 18 months. Burberry has announced a replacement for long-standing creative director Christopher Bailey as the luxury fashion brand’s new boss continues to make his mark on the firm. The group has appointed former Givenchy designer Riccardo Tisci as its new chief creative officer, effective from 12 March. It comes as new Burberry chief executive Marco Gobbetti, who took over from Bailey last year, oversees a strategic overhaul at the group, which is famous for its trench coats.