Broadcaster STV advertises a 10% rise in key revenues

STV has reported a 10 per cent rise in third-quarter advertising revenues which make up the lion's share of the Scottish broadcaster's income.

This "sustained improvement" was in line with that predicted by the firm in its first-half results in August, when it reported a surge in underlying pre-tax profits on the back of a 21 per cent increase in overall broadcasting revenues. The rises follow an extremely depressed advertising market in 2009.

Rob Woodward, chief executive of the Glasgow-based group, said national advertising revenue continued to perform strongly even though regional ad sales struggled.

"The trend that we have seen in the overall advertising market in the first half of this year has continued into the third quarter," Woodward said. "We have not seen the same recovery in Scotland as we have seen in national advertising demand."

Its brief interim management statement, said trading and performance across the business continued to meet expectations.

In addition to the third-quarter rise, STV anticipates an increase of between 15 and 20 per cent in airtime revenues for October. That is expected to be followed by a rise of between 5 and 10 per cent in November.

Woodward said STV's digital business, which includes its recently-launched network of "hyper-local" Scottish websites, was continuing to hit its growth targets. In its statement, the group added there had been "no change in the status of litigation" between it and ITV, with potential court action scheduled for next year.

The two groups have been locked in a long-running dispute in which ITV is seeking compensation for network programmes not aired by STV. The Scottish broadcaster, in turn, is claiming damages for ITV's online deals with Virgin Media and BT Vision to show network content north of the Border.

Analysts at Numis Securities described the update as "encouraging", and raised their full-year profit forecast by 1 million to 11.5m.

Shares in STV closed unchanged at 118p, giving the company a market capitalisation of slightly more than 45m.