OPERATING profit for STV Group in the year ended December 31 is expected to be at least £18 million – comfortably ahead of expectations – driven by a stronger than expected regional and digital performance.

The group said STV-controlled advertising continued to outperform the wider market, with regional advertising up 8% in the second half of the year and down just 5% for the full year, delivering growth in five of the last six months of 2020.

Video on Demand (VOD) advertising on the STV Player continued its strong growth, rising by 11% in H2 and 12% for the full year. It finished 2020 with four consecutive months of growth.

Total advertising revenue improved to broadly flat in Q4, with November at -1% and December +3%, following Q3 and Q2 figures of -4% and -38% respectively. STV’s decline in total advertising revenue for the full year has narrowed to -10%.

The group said the combination of growth in digital revenue, strong cash collection and management actions would result in it reporting a net debt position significantly better than market expectations – less than £20m. STV’s record viewing performance continued on TV and online, with TV up 14% over the year and STV Player rising by 68% – the fastest growth of any broadcaster VOD service in the UK.

Both the Scottish and UK governments have confirmed TV production can continue during the current lockdown, resulting in very little impact on STV Studios’ production schedule so far, with Covid safety protocols continuing to work well.

STV chief executive Simon Pitts said 2020 had finished strongly, and added: “We expect to report an operating profit and net debt position well ahead of market expectations, underscoring the resilience of our business, the loyalty of our viewers and our strong digital growth trajectory … Despite the ongoing challenges around Covid-19, we have managed to accelerate our strategy and remain confident in our prospects for growth.

“We have a strong programme line-up in Q1 across STV and the STV Player, with more bingeworthy drama than ever before, while in STV Studios our slate of new commissions means that 2021 promises to be our most successful year yet.”