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Broadcaster targets £10m savings to survive outbreak

STV has cancelled its planned dividend and is cutting costs to “ensure it remains financially resilient” in the light of the coronavirus outbreak.

In a trading update the Glasgow-based broadcaster said it was no longer planning a final dividend of 14.7p per share for the calendar year 2019, in a move that would retain £5.5 million. It said it would revisit the position on future dividends once there was “greater clarity on the impact of COVID-19 on the business.”

In addition it said it had identified a further £2 million of other cost savings across the business for 2020, along with around £2.5 million of cash savings from delayed capital spending.

The group said it was taking decisive action on costs and cash flow and dividends to mitigate the anticipated advertising decline.

It said it had access to cash through its £60 million overdraft and revolving credit facility. Net debt was £37.5 million at the end of 2019 and is expected to be around £38 million at the end of March 2020, comprising cash balances of £10 million and £48 million of drawn down facility. It said the unused portion of the facility is £12 million and that was accessible under the terms of the agreement.

It said it had implemented contingency plans to sustain its public service news output and to continue to ensure it offers a schedule of new drama, entertainment and factual programmes.

The group said it has achieved a continued strong viewing performance on TV and online in Q1, with a spike in younger audiences. Its STV Productions arm recently secured a new contract to produce Antiques Road Trip for the BBC.

STV chief executive Simon Pitts said: “Over the last two years STV has demonstrated its resilience and ability to grow the business in the face of challenging market conditions.

“These are now extraordinary times and our immediate focus must be on protecting our brilliant people and fulfilling our public service role to keep our viewers informed and entertained in the most trying of circumstances.

“We have implemented contingency plans to keep our programmes on air, especially our news coverage, have taken decisive steps to reduce costs, manage our cashflow and make funding available to support the local businesses and charities in Scotland who now need it most, and we remain committed to our successful growth strategy for the long term.”

Published in Insider -