STV has reported a £20.5million operating loss for the first half of the year after taking a £25.4million impairment charge against its studios business amid a prolonged slowdown in television commissioning.
The Scottish broadcaster said group revenues fell 27% to £66.1million in the six months to the end of June, from £90million in the same period last year.
The fall was largely driven by STV Studios, where revenues dropped from £42.2million to £15.5million.
STV said the £25.4million non-cash impairment reflected short to medium-term uncertainty over the pace and scale of new commissions, with delays in decision-making continuing across the production market.
However, its core audience business performed strongly, with adjusted operating profit up 21% to £11.1million and total advertising revenue increasing 5% to £48.1million, helped by the FIFA World Cup.
As a consequence, the firm's adjusted operating profit was £5.9m, down 12% year-on-year.
Chief executive Rufus Radcliffe said: “Our first half performance was in line with our expectations and previous guidance. The boost to advertising revenue and viewing from the FIFA World Cup, combined with disciplined cost management, helped offset reduced Studios profitability which reflects the timing of delivery of scripted programming and continued weakness in the commissioning market.
“The Studios division delivered several notable creative and commercial successes in the first half, including Primal Media's first commission for Disney's Hulu and our in-house drama label, newly rebranded Blackhill, giving Netflix a global number one drama in The Witness, continuing the growth of our international customer base.
"We also strengthened our scripted pipeline through our exclusive partnership with renowned actor and director Kevin McKidd's Ferryman Films. Given the prolonged slowdown in commissioning activity, we have recognised a non-cash impairment charge in Studios, reflecting a prudent reassessment of short- to medium-term market conditions while remaining confident in the long-term growth prospects of our business and the opportunities ahead."
He added: “Our audio venture continued its strong start with STV Radio entering Scotland's top ten most-listened-to commercial stations after just six months on air, well ahead of our expectations. In Q4, we will launch our AI-powered advertising service, ADapt, offering businesses an unrivalled cross-platform audience reach across broadcast, digital and audio in Scotland.”
STV has completed a restructuring programme which has reduced its workforce by around 60 roles and remains on track to deliver annualised savings of £8million by the end of this year.
FSTE100
The UK's flagship share index, the FTSE 100, was up 4 points at 10,816 shortly after opening this morning.
Brent crude oil futures were up 1.72%, sitting at $98.67 a barrel this morning.
Companies reporting
- Computacenter - Half Year Results
- Dunelm Group - Full Year Results
- Funding Circle Holdings - Half Year Results
- Johnson Service Group - Half Year Results