DESPITE a turbulent year for the television industry generally,

Scottish Television managed to increase advertising revenue and profits.

Operating margins at 14% before the Exchequer levy, are among the best

in ITV.

Profit before tax increased by 18% to #10.1m. Advertising revenue rose

by 3% to #90.8m in line with the industry. STV maintained its dominant

market share position in Central Scotland, with 41.2% compared with BBC1

in Scotland's 32.5%. Channel 4 has a greater share of the Scottish

market at 12.7% due to higher demand for imported American programmes.

STV is a 20% shareholder in Good Morning Television (GMTV) which has

had a traumatic start to its breakfast franchise in terms of

disappointing viewing figures. Its management has been strengthened.

However, managing director Gus Macdonald said he was confident in Greg

Dyke's abilities to ''make a good job'' of the station. Just three

months into its 10-year franchise, Mr Macdonald said STV was taking a

''sanguine'' of its investment. In its accounts, STV wrote off #1.8m of

GMTV's start-up costs last year.

STV gained a lot of publicity last year when it won a new 10-year

licence with a minimal bid of just #2000. STV chairman William Brown

said the aftermath of the recent ITV franchise round was much less

traumatic than in 1980 or 1968. The company used the final year of its

old franchise to restructure the business, at a cost of #4.6m. Core

staff levels were reduced from 599 in 1991 to 360 in the first quarter

of 1993.

A wholly-owned subsidiary, Scottish Television Enterprises, was set up

to specialise in making programmes for UK and international sale.

Programme sales increased by 32% last year to #23.2m, with new orders

won for successful series such as Taggart and Doctor Finlay. This augurs

well for sales in the current year which the company expects to reach

#29m, helped by strong demand for its children's programmes.

Costs are being cut across the board. More than 30% of its regional

production is now done by independent operators. Various activities such

as electronic engineering maintenance and airtime sales have been

subcontracted out. The balance sheet was strong with year-end cash

balances of #16.6m.

The moratorium on takeovers of ITV companies ends this year. Mr Brown

said he did not expect it to be extended but that the company had ''no

intention'' of taking over either Border TV or Grampian. ''We do not

have any expansionist ideas at the moment,'' he said. As one of the

smaller ITV companies, STV is seen as potentially vulnerable to a

takeover if rules are relaxed, but Mr Brown said there would be enormous

cultural and political pressures involved if any takeovers of ITV

companies were proposed.