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.
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