Shares in STV were lower in early trading yesterday after the broadcaster revealed a drop in pre-tax profits.
A 25% increase in the interim dividend to 3p per share failed to inspire investors after the Glasgow-based group declared a pre-tax return for the six months to June 30 of £6.8 million.
The figure was £1.6m lower than in the same period in 2014 but included an exceptional cost of £1m related to its investment in advertising platform Mirriad, which had to be recapitalised after failing to complete a major fundraising.
Revenues at STV were also marginally lower for the first half at £53.6m.
However, CEO Rob Woodward said the firm was on track to meet financial expectations for the full-year.
“We are continuing to create sustainable growth and increased consumer margins, resulting in a rebalancing of the business through the growth of our profitable non broadcast services,” Mr Woodward said.
“Confirmation of the enhanced dividend payment reflects the board’s confidence in our ability to deliver against our strategic plans.”
Overall, STV’s consumer arm grew revenues by £1.1m to £51.9m in the first half but profits fell by £1.2m to £9.7m.
The firm’s productions arm saw revenues fall from £3.9m to £1.7m in the period, with losses flat at £1.1m.
However, the firm yesterday announced a new strategic tie-up between the productions division and GroupM Entertainment, a WPP business, that it hopes will deliver growth.
While upbeat about the firm’s prospects, Mr Woodward said STV was being impacted by regulatory issues.
He said the group was pushing to have STV as a public service broadcaster moved forward to the front page of the television channel listings when BBC3 dropped off next year in an effort to improve its visibility among viewers.
He also said the company was in talks with the authorities over retransmission fees, arguing that Sky and Virgin are commercially benefiting from STV output that they show time and again when the original creators of the shows do not receive a reproduction fee.
Shares in STV closed the day down 22.25p at 445p yesterday.