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STV highlights uncertainties around prospect of IndyRef2 as it reveals 2016 full year results

IndyRef2 uncertainty sours STV’s full year results

STV has highlighted ongoing political uncertainty, amplified by increasingly clarion calls warning of an impending second referendum on Scottish independence, as a cloud hanging over its medium-term prospects, while reporting 3% revenue growth to £120.4m for 2016.

Other uncertainties such as the regulatory environment and an ever in flux advertising market were also cited in the annul results statement.

STV also revealed that its operating profit fell by 3% to £19.7m although the broadcaster's digital growth saws digital revenues rise by 205 to achieve £7.9m.

These numbers belie yet further political turmoil on the horizon however, with the broadcaster stressing it has taken a number of mitigation measures to hedge against expected volatility in the advertising and financial markets should the Scottish Government call a so-called Indy Ref 2 in the coming weeks.

Outlining its approach in a financial statement STV wrote: “The Group has in place a number of measures as mitigation against increased volatility in the advertising and financial markets. These include the Network Affiliate Agreement with ITV in relation to volatile advertising markets and the Group's bank facilities maturing in the medium term (2019) together with half of the core net debt (£15m) being subject to interest rate hedges to July 2018 to reduce exposure to financial market movements.

“In addition, the Scottish Government has agreed that our Public Service Broadcast licences will be respected through their full duration (to 2024).”

Rob Woodward, chief executive officer, said: "Today's strong results demonstrate robust and resilient performance in our core business and growth in STV Productions and our highly profitable digital activities.

"The Consumer division has delivered its highest margin for 11 years, despite a weak airtime market in the second half of 2016. We are continuing to de-risk the core business placing the company in a strong position to deal with any weakness in the advertising market in the short to mid-term whilst relentlessly pursuing our growth objectives.

"Our digital activities are performing strongly with a margin of 52%. These products enable us to extend our reach and impact through our family of consumer services."

Woodward also thanks the broadcaster's senior independent director David Shearer who will step down from the board after a decade.

STV is also planning to launch a second TV network service in spring 2017 which aims to increase its family of consumer services.

Earlier this year, the broadcaster was forced to deny it had ‘gagged’ its digital politics and comment editor under pressure from the SNP, who subsequently left over the matter.