A strong performance from the higher-margin regional and digital sales has enabled Stv Group (LON:STVG) to drive strong growth in operating profit. The interim and full year dividend have been increased by 33% and 20% respectively and new KPI targets for 2018 introduced to support STV’s ongoing strategy to diversify the group’s broadcast franchise.
Strong operating margins
H116 results were broadly as flagged in the April trading update. Revenues grew 5% to £56.2m. Growth was skewed towards the high-margin digital and regional airtime sales, enabling operating margins to expand to 19.6% from 16% in H115 and operating profit increased 28% to £11.0m. The IAS 19 valuation of the pension deficit has been increased by £39m, however, this should not impact cash funding of the scheme, which is already based on more conservative assumptions (the outcome of the schemes triennial valuation is expected in Q3). An interim dividend of 4p has been announced (+33% y-o-y) as has the intention to increase the full year dividend 20% to 12p.
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