Broadcaster STV failed to meet its own ambitious digital and production revenue targets last year, but was still able to boost profit and pay down a debt pile which stretched to more than £50 million.
Overall turnover climbed £700,000, or less than a percentage point, to £102.7m last year, while pre-tax earnings rose by £400,000, or 3%, to £14.4m.
But the company which runs what used to be regarded as the third terrestrial TV channel in all parts of Scotland except the former Border area said it had reduced debt by £9.2m, or 17%, to £45.3m during the year to the end of December.
It said it would retain a short-term focus on debt reduction, but its board remained committed to resuming dividend payments “at an appropriate time”.
The operator had been locked in a bitter and complex 1-year legal battle with ITV over payments related to programmes, and yesterday booked an exceptional £5.3m charge for the final accounting of its £18m settlement with the network.
STV said the sum also included a charge related to its switch to affiliate status, and a £4.1m write-down in the value of programme assets.
The dispute ended in early 2011, with STV agreeing to settle the case a matter of weeks before it was due to come to court.
The disagreement prompted ire from many viewers who found themselves unable to watch their favourite ITV programming, with popular shows, including landmark dramas, dropped from the schedules.
Chief executive Rob Woodward said the company had delivered “strong” results, with double-digit growth in operating profit before exceptionals.
He said a Westminster decision to extend the broadcaster’s licences for up to a further decade gave reassurance to investors.
“Our digital and production businesses are delivering strong growth momentum, with STV Productions continuing to secure new series commissions,” he said.
“The recommendation to renew our licences for the maximum term of 10 years provides certainty for the future, and we remain on track to deliver our sustainable growth objectives.”
Digital revenue climbed to £6.5m and by 84% in growth areas, but failed to reach a £9.1m target though, at 26%, anticipated margins were exceeded.
Production revenues fell £1.8m short of their £12m target despite growing 21% on the prior year, and managed only a 2% profit margin against the board’s 10% goal.
STV said its relationships with advertisers had strengthened, with developing online platforms helping to attract new clients.
The company also increased the data it holds on its audiences by as much as 55%.
It expects air-time revenue to climb by 3% in the first quarter of this year, despite a 16% slide in regional income thanks to the phasing of advertising spend by the Scottish Government.
Digital revenues are expected to climb 35% in the quarter.
STV said production income would be boosted by new commissions for Celebrity Antiques Road Trip and a new Jo Brand chat show.
Markets reacted positively to the news, with shares climbing 12.6p to 142.1p.
business@thecourier.co.uk