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Annual Report and Accounts 2022
Committed to great content, connected to our communities
View our Annual Report and Accounts and
other information about STV at stvplc.tv
Contents
Overview
01
02
03
2022 financial highlights
Introducing STV
STV strategy, targets and
progress to date
Strategic Report
04 Chairman’s statement
06 Chief Executive’s report
08
10
12
The STV investor proposition
STV business model
Engaging with our stakeholders
(S.172 statement)
14 Operating review: Broadcast
20 Operating review: Digital
24 Operating review: Studios
30 Finance review
34 Risk management
42
Taskforce on Climate-related
Financial Disclosure (TCFD) report
Non-financial information
statement
47 Social impact
46
Governance
Introduction to governance
55
56 Board of Directors
59 STV Management Board
60 Corporate governance report
67
72 Remuneration report
88 Directors’ report
Governance Committee reports
Financial Statements
91
97
97
Independent auditors’ report to
the members of STV Group plc
Consolidated income statement
Consolidated statement
of comprehensive income
Consolidated and parent company
balance sheets
Consolidated and parent company
statements of changes in equity
100 Consolidated and parent company
99
98
statements of cash flows
101 Notes to the financial statements
124 Five year summary
Additional Info
125 Corporate advisers
126 Shareholder services
2022 financial highlights
STV Annual Report and Accounts 2022 01
Strong financial
performance despite
macroeconomic
uncertainty
Revenue
Total advertising revenue
£137.8m
£110.0m
2021 £144.5m
2021 £112.6m
Adjusted operating profit1
Adjusted operating margin1
£25.8m
2021 £25.2m
Profit before tax
£22.2m
2021 £20.1m
18.7%
2021 17.5%
Adjusted EPS2
42.3p
2021 45.6p
Dividend per share
Non-broadcast profit (%)1
11.3p
2021 11.0p
38%
2021 36%
1
Before exceptional items
and inclusive of High-End
Television tax credits
(2021 only) (note 27).
2
Before exceptional items and
IAS 19 finance costs (note 9).
Throughout this Annual
Report, where we state
record financial performance,
it is made by reference to
2010 when the final disposal
was made and the Group as
we know it today remained.
GovernanceFinancial StatementsAdditional InfoOverviewStrategic Report
02 STV Annual Report and Accounts 2022
Introducing STV
Scotland’s home of news,
entertainment and drama
STV Group plc serves audiences with quality content
on air, online and on demand.
The business is organised into three dynamic operating
divisions, all supported by a central enabling function.
Broadcast
Our broadcast channel,
STV, is accessible
free-to-air on all the main
TV platforms in Scotland
and reaches 3 million
adults each month.
Our Broadcast division runs commercial Public Service Broadcaster, STV, which operates the
Channel 3 licences across central and north Scotland. STV brings viewers a strong network
schedule of programming alongside our own locally produced news, current affairs and factual
entertainment programming.
STV is the most-watched peak time channel in Scotland and is home to some of the most
popular shows on television, including iconic soaps Coronation Street and Emmerdale;
entertainment hits The Masked Singer and I’m a Celebrity… Get Me Out of Here!; gripping 9pm
dramas; and a wide-ranging selection of home-grown productions. Flagship news programme
STV News at Six is the most watched news programme in Scotland.
STV is advertiser funded and our reach as a marketing platform is unrivalled in our home market.
National sales of linear spot and sponsorship, and VOD advertising on STV Player, are managed by
our national sales agent, ITV, and our Scottish clients are serviced by our dedicated Scotland
sales team. We offer a ‘one stop shop’ to regional clients, helping them with advert creation
and design, campaign structure, and post campaign research.
Digital
STV’s rapidly growing,
free streaming service,
STV Player is available
across the UK on all major
platforms, and features
an ever-expanding library
of premium content.
STV Player gives viewers in Scotland the opportunity to watch STV shows on their terms, live or on
demand. The service offers viewers an extensive catalogue of content from the UK and around
the world, including 167 must-watch drama box sets such as dystopian drama, The Commons,
Irish crime thriller, Blood, and Australian family drama, McLeod’s Daughters; a wide range of
factual entertainment shows and popular archive material, like Taggart. Much of this rich library
of owned and acquired content is not available to stream on any other platform in the UK.
STV Player is now pre-installed in three quarters of the UK’s connected TV homes and is available
on all major platforms, including Sky Q, NOW, Virgin Media, Amazon Fire TV, Freesat, Youview
and Freeview Play.
Viewers can upgrade to STV Player+, a subscription service which offers the opportunity to watch
Player content advert-free and download shows for offline viewing.
Studios
STV Studios has an impressive track-record across genres, with commissions for broadcasters
and streamers such as BBC One and Two, ITV, Channel 4, Channel 5, Discovery+, AppleTV+,
Really and Sky.
The Group’s award-winning
production business,
STV Studios, is Scotland’s
biggest production
company, creating and
producing world class
content for a range of UK
and international broadcast
networks and streamers.
STV Studios is a family of nine creative labels. Our in-house labels are STV Drama, STV Entertainment
and STV Factual. We own a majority stake in award-winning unscripted producer, Primal Media,
and a minority stake in Northern Ireland based drama producer, Two Cities Television. We own
the younger-skewing entertainment label, Barefaced TV, who’s first major commission was with
global streamer, Discovery+, for Written in the Stars; and we have a co-production agreement with
scripted specialists, Tod Productions, with whom we are co-producing a major drama for AppleTV+.
Our most recent additions are unscripted producers Hello Mary, who are based in Brighton and
joined in 2021 and Mighty Productions based in Glasgow and London who joined in 2022.
STV Studios continues to be on a promising growth trajectory, delivering a record-breaking
30 programme commissions in 2022, with a strong pipeline for future production.
2022 saw us showcase
and produce a diverse
range of series and new
commissions, with big
names and broad appeal,
both on our own linear
and digital channels and
for other UK networks.
Brilliant content drives big
audiences, and we have
both in spades – with so
much more to come.
What Killed the Whale?
STV Studios’ investigative documentary for Channel 4 into
the most arresting victims of the climate emergency.
I’m a Celebrity… Get Me Out of Here!
Most watched TV series on any channel in 2022.
Celebrity Bridge of Lies
An instant ratings success for BBC One, the STV Studios
quiz show received a bumper commission in 2022.
Litvinenko
Through an enhanced strategic partnership with ITV,
STV Player has exclusive Scottish rights to an exciting
range of ITVX original and premiere content including
Litvinenko, starring David Tennant in the title role
which launched in December.
Screw
A recommission of STV Studios’ hit Channel 4 drama
was confirmed following the success of the first series.
Vera
The crime drama series remains a perennial favourite on
STV, featuring in our top ten most watched programmes.
What’s on Scotland
STV’s successful weekly entertainment show fronted
by presenters Emma Cameron and Laura Boyd.
Blue Lights
Produced by STV Studios’ associate label,
Two Cities Television, the fast-paced cop drama
set in Belfast is due to air on BBC One in 2023.
STV Annual Report and Accounts 2022 03
STV strategy, targets and progress to date
Our strategic priorities and targets are focussed on the
enhanced diversification of our business and our divisional
KPIs demonstrate our progress to the end of 2022.
Group
2023 targets
• At least 50% of operating profit from outside
traditional broadcasting
• Carbon net zero business by 2030
• Connect, reflect and support communities both
on and off air through inclusive practices and
STV Children’s Appeal
Maximise
Broadcast
• Maintain viewing leadership
• Grow Scottish ad revenues
• Secure new licence
2023 target
Grow STV-controlled
broadcast revenues to £20m
Read more
on page 14
Drive
Digital
Key performance indicators
Viewing share
ITV viewing outperformance
New advertisers
19.3%
2021 19.6%
+8%
2021 +11%
112
2021 85
• Continuously strengthen content
• Grow audience and revenues
• Increase active users
2023 target
Double digital viewing,
users and revenues to £20m
Key performance indicators
Monthly active users
Online streams
Player-exclusive streams
Read more
on page 20
+10%
2021 +54%
+1.5%
2021 +63%
-20%
2021 +137%
Build world
class Studios
• Accelerate returning series
• Expand customer base
• Invest in talent
2023 target – achieved early
Quadruple Studios revenue
to £40m
Key performance indicators
Programme commissions
Returnable series
Returning series
Read more
on page 24
30
2021 16
10
2021 12
11
2021 7
GovernanceFinancial StatementsAdditional InfoOverviewStrategic Report 04 STV Annual Report and Accounts 2022
Chairman’s statement
Paul Reynolds
Chairman
As Scotland emerged in 2022 from the
pandemic and faced new uncertainties
from the turbulent economic and
political climate, we aimed to position
STV as the trusted source of news and
current affairs, uniquely tuned-in to
our Scottish viewers.
Whether it be broadcast, on demand or online,
we have successfully delivered high-quality,
affordable entertainment and all the while
supported our communities through the STV
Children’s Appeal, our aspiring businesses
through the STV Growth Fund, and our creative
sector through world-class, locally produced
programming. No business can take its long-term
success for granted but I firmly believe that a deep
understanding and alignment with our customers
and the wider business environment is vital.
Performance
I am pleased to report that we again delivered
a strong financial performance during the year
with total revenue of £138m (2021: £145m) and
an adjusted operating profit of £25.8m (2021:
£25.2m), up 2% on a record performance in 2021
and up 14% on the pre-pandemic year of 2019.
The Finance Review contains further information
on this year’s performance on pages 30 to 33.
Dividend
The Board appreciates the continued support
of our loyal shareholder base. Recognising the
importance of the dividend and in light of another
strong financial performance, we have been able
to maintain the policy of paying a sustainable,
progressive dividend. The Board has therefore
declared a final dividend of 7.4p per share, which,
when added to the interim dividend, provides
a total dividend for the year of 11.3p per share,
an increase of 3% on 2021.
Strategy
STV has evolved significantly in recent years
and 2022 saw that change accelerate. The
media industry in which we operate continues
to change rapidly and our strategy is on-track
to diversify our business such that by the end of
2023 we will derive at least 50% of our Group’s
profit from non-broadcast activities, principally
digital streaming and programme production.
We are proud to be Scotland’s Public Service
Broadcaster and connect strongly with our
Scottish audiences, particularly via our local
programming. And whilst broadcast TV remains
our backbone and we continue to be Scotland’s
most widely watched peak time channel, I am
pleased that consumption of our streaming
content rose by 6% as STV Player becomes the
go-to destination for the widest selection of
drama in Scotland and beyond. In December
we completed negotiations to extend our
partnership with ITV beyond broadcast and
into digital streaming, a deal which further
strengthens STV Player’s content proposition.
The STV Studios business reached record highs
with 30 new programme commissions secured
this year (2021: 16). Productions such as Screw
for Channel 4 (filmed in Glasgow’s Kelvin Hall)
and standout commissions from global streaming
platforms that were won against stiff international
competition underline great progress towards
our goal of becoming the UK’s leading Nations
and Regions production company.
Diversification has provided a new focus for
the commercial, operational and creative skills
of our people and allowed STV to be far more
resilient to the vicissitudes of demand and take
advantage of the boom in global streaming
content. Undoubtedly, the uncertainties in the
wider economy and increasing pressures from
high inflation and the rising cost of living
brought significant challenges to the business
but your Company has nevertheless delivered
another strong financial performance, in large
measure due to the relentless strategic focus
on diversification.
STV Annual Report and Accounts 2022 05
Governance
As Chair, one of my key responsibilities is to ensure
good corporate governance (see pages 55 to 66).
In this endeavour, I am extremely well supported
by my fellow Board members. The Board
composition and effectiveness is continually
monitored to ensure we have the right skillset
and breadth of experience with which to function
effectively. The Board provides challenge and
support to the Executive to ensure the Group’s
strategy is appropriate, achievable, and ultimately
delivered in support of STV’s financial strength
and resilience. Anne Marie Cannon will be stepping
down from the Board at the AGM in April 2023 after
more than eight years’ service and I would like to
record my thanks for her significant contribution,
particularly as Chair of the Remuneration
Committee. Recruitment of Anne Marie’s successor
is in-train and will be announced in due course.
At STV, we believe effective stakeholder
engagement is key to the long-term success of
our business and we aim to proactively engage
with our main stakeholders and understand what
is most important to them to continually drive
the right outcomes across all stakeholder groups.
Pages 12 and 13 say more about this, showing
how we are working with and delivering for
Customers, Colleagues, Suppliers, Investors,
Communities and environment, as well as for
Government and Regulators.
Responsible business
The Group is fully committed to a sustainable
future. Throughout 2022 significant progress has
been made in all areas of activity that underpin
our STV Zero strategy to enable the business to
become net zero carbon by the end of this
decade. An important milestone was achieved in
December 2022 through confirmation from the
SBTi that it had validated STV Zero and recognised
that the impact of our strategy is consistent with
the goals of the Paris Agreement, whereby if all
STV Zero targets are achieved this will contribute
to limiting global warming to 1.5 degrees Celsius
above pre-industrial levels.
I have seen so often the benefits yielded by
improving diversity of thought and creating an
inclusive workplace. STV has embedded its Diversity
and Inclusion strategy into the business. There
continues to be high levels of engagement and
a wide range of activities to enable achievement
of diversity targets and ensure an inclusive
working environment for all our colleagues.
Our colleagues are at the heart of our business and
their wellbeing remains of the highest importance
to us. During the year, Senior Independent Director
and Employee Director Simon Miller attended
meetings of the Employee Voice Forum comprising
representatives from every team and location.
Board meetings were held at various Company
offices to meet and engage with a wider group of
colleagues. This year our employee opinion survey,
Have Your Say, focussed on the new hybrid way of
working. Engagement levels remain high at over
83% and overall sentiment was very positive.
STV’s unrivalled media reach in Scotland enables
us to have a significant social impact by shining a
light on key issues. I have the privilege of chairing
the STV Children’s Appeal and I have been
heartened by the contribution it continues to
make in support of so many worthwhile causes,
helping to drive positive change. I’m particularly
proud that the Appeal has been trusted by the
Scottish Government to disburse up to £1 million
of matched funding every year since 2011.
Looking to the future
There’s a refreshing energy about STV as it strives
to meet its ambitious strategic goals. We’re
proudly Scottish but in no doubt that we must
succeed in an increasingly global media industry.
We bring the best of the world to our customers
and some of the world’s most demanding brands
commission our people to make content for a
global audience. Technology change marches
relentlessly and we keep abreast of it. We have
some important milestones to work through in
the short-term – operating through tough market
conditions, securing a new Media Bill, navigating
new pension legislation, and renewing our
broadcast licences. We have demonstrated that we
can evolve to meet these sorts of challenges and
ride the turbulence that markets have thrown. That
gives good grounds for optimism about the future.
I would like to thank everyone who works at STV
for their commitment and dedication. I especially
acknowledge the leadership demonstrated by
CEO Simon Pitts, CFO Lindsay Dixon and the
Executive Team, which has underpinned the
Group’s performance in 2022. May I also thank
the Board for their expert advice and support.
Paul Reynolds
Chairman
There’s a refreshing energy about STV as it strives
to meet its ambitious strategic goals. We’re proudly
Scottish but in no doubt that we must succeed in
an increasingly global media industry.
OverviewStrategic ReportGovernanceFinancial StatementsAdditional Info 06 STV Annual Report and Accounts 2022
Chief Executive’s report
Simon Pitts
Chief Executive
Strategic highlights
The media landscape is constantly evolving,
particularly around audience habits, and our job
is to anticipate those trends and make sure we
have the content, distribution and commercial
strategies to succeed. Highlights in 2022 included:
• Maintaining our lead as Scotland’s most
popular peak time TV channel for the 4th
year in a row
• Our flagship news programme growing its
lead over the BBC as the most watched news
programme in Scotland
• FIFA World Cup 2022 and I’m a Celebrity… Get
Me Out of Here! becoming our most streamed
sporting event and most streamed series
respectively as STV Player enjoyed its most
successful year ever
• A resilient advertising performance that saw
Total Advertising Revenue decline by only
2% against the highs of 2021, despite the
economic headwinds
• A record 30 new programme commissions in
STV Studios for a range of networks and global
streamers, including 11 returning series across
the Group.
At the end of 2022 we also concluded a new,
long-term partnership with ITV that has seen
us secure an additional 100+ hours of new UK,
original content exclusively for STV Player in
Scotland each year, with new drama titles
dropping weekly for our viewers. This enhanced
partnership, which also extends to digital
advertising sales, further aligns our interests
and significantly strengthens our digital business
for the streaming age.
2022 was another year of record*
performance for STV, creatively and
commercially, despite the increasingly
challenging economic backdrop.
Our business continues to prosper,
diversify and grow, while at the same
time supporting Scottish communities
and helping to stimulate and grow the
country’s creative sector and local
economy, consistent with our core
mission as Scotland’s public service
media company.
As with every other business, the last 3 years
have challenged us like never before, and I’m
very proud of how we’ve stepped up for our
people, our audiences and our partners. Despite
the unprecedented uncertainty and with strong
support from our shareholders, we’ve been able to
maintain momentum in our diversification strategy
and deliver record profits: sustaining our lead in
broadcasting in Scotland, growing our digital
streaming business STV Player, and overseeing
a creative renaissance in STV Studios. We’ve done
this by looking after our people, both during the
pandemic and since as we’ve adapted to new ways
of working in the months that have followed. This
is still a work-in-progress, as it is for everyone, but
we’ve emerged from the pandemic in a stronger
position with an even more cohesive team.
Our overarching strategy is to maximise the value
of our linear broadcasting business while driving
STV’s diversification through streaming and
production growth. Our target is that 50% of our
profits should come from outside traditional TV
advertising by the end of 2023 – growing from 24%
when we set out our growth plan in 2018, to 36% in
2021 and to 38% in 2022. We also remain on track
to achieve the specific targets within that overall
diversification strategy: to double digital viewing,
users and revenue to £20m, and to quadruple
production revenue to £40m by the end of this year.
* In terms of commissions won and
adjusted operating profit generated.
STV Annual Report and Accounts 2022 07
Our overarching strategy is to maximise
the value of our linear broadcasting business
while driving STV’s diversification through
streaming and production growth.
STV’s social impact
Regulatory backdrop
As Scotland’s Public Service Broadcaster we occupy
a privileged place in the lives of our viewers and
have an opportunity not just to entertain, inform
and engage but also to use our platform as a
force for good in society. We do this through an
extensive social purpose strategy which spans
community fundraising, sustainability, diversity
& inclusion and mental health & wellbeing.
Over the past decade we have raised more than
£30m for children living in poverty in Scotland
via the STV Children’s Appeal; our extensive
sustainability strategy aims to raise awareness
and drive behavioural change amongst our
viewers while delivering a net zero carbon STV by
2030; and our diversity strategy is breaking new
ground, with initiatives like STV Expert Voices
so far training over 700 people from diverse
backgrounds to become expert contributors
to STV news and current affairs programming.
We also remain an important partner to the
business community across Scotland, with our
£30m STV Growth Fund supporting an ever-
increasing number of SMEs and, importantly,
championing those businesses promoting
sustainable and inclusive practices. We deliver
consistent investment and skills training to the
sector through our growing production arm, with
our drama Screw for Channel 4 a strong example
of our commitment to Scotland’s talent base; and
our bursary scheme in partnership with the Royal
Television Society provides funding, mentorship
and work placements for dozens of students
from lower income families.
Ours is predominantly a ‘self-help’ strategy but
we also need the right regulatory framework in
place to continue to flourish for the long term.
The UK Department for Digital, Culture, Media
& Sport has recognised the ‘unique relevance’
of STV’s public service contribution, particularly in
Scottish news and current affairs, the provision of
original UK programming, and the importance of
ensuring our programming is available and easily
found on all major digital platforms. We look
forward to swift publication of the Government’s
new Media Bill, which we hope will legislate for
this new regulatory framework to secure the
vital contribution of free-to-air Public Service
Broadcasters in the digital age. In addition our
regulator Ofcom has recommended the renewal
of our public service licences for a further 10-year
term from 2025, which we expect to be clarified
by the UK Government during the course of 2023.
We will continue to engage with all stakeholders
on these important matters.
Momentum into 2023
Despite the ongoing economic uncertainty,
I remain extremely positive about the future of our
business. The last two years demonstrate that we
can withstand economic turbulence and continue
to prosper and grow, even in tough times, with a
clear and ambitious strategy and a talented and
motivated team. I’d like to thank our Chairman
and the Board for their ongoing support and
counsel to both me and the wider leadership
team, and I am indebted to our people, who
are the beating heart of our business and who
I feel privileged to work alongside every day.
Simon Pitts
Chief Executive, STV Group plc
OverviewStrategic ReportGovernanceFinancial StatementsAdditional Info 08 STV Annual Report and Accounts 2022
The STV investor proposition
STV has a clear strategy to transform the Company into
a digital streaming and IP-led media business, maximising
the value of our linear Broadcast channel while growing
our Digital and Studios divisions to take advantage of
the accelerating market in global video.
This diversification strategy is key to generating sustainable
value for our shareholders, as it will provide us with a
leading digital platform and library of programme IP that
can be monetised, both of which will endure through the
changing habits of viewers and increased digitisation.
We have set the target of achieving at least half of our
operating profit from non-broadcast earnings by the
end of 2023 (from 24% in 2018). We are confident that
pivoting our business towards digital and studios will
drive long-term value for shareholders.
STV’s market position
We have an increasingly strong market position
across all divisions.
• Fast growing free streaming service, STV Player,
offers an extensive catalogue of content from
the UK and around the world.
• STV Studios is the largest production company in
Scotland and uniquely placed to take advantage
of the growing investment in Nations and
Regions production across the UK.
• Our Broadcast USP is the consistent delivery
of mass audiences to a high-quality TV
schedule of network and Scottish content.
STV is the most popular peak time TV channel
in Scotland, reaches three out of four Scottish
adults every month (3m), and attracts more
than three times the audience of its nearest
commercial competitor. This makes us by
some margin the most effective medium
for advertisers in Scotland.
High margin digital business
STV Player has seen rapid growth over the last
three years, driven by significant improvements
in the user interface and reliability of our
streaming service; expansion on all major
platforms across the UK; and a growing
programme offering which combines first run
original network and regional content and a
huge array of acquired third party international
content and rich STV archive. In December 2022,
we announced a strategic partnership around
content sharing and advertising sales with ITV,
that creates incremental digital value for our
business and sees ITV’s market leading sales
team sell our digital VOD and simulcast
advertising from 2023, allowing us to benefit
from ITV’s unrivalled scale in the market.
Studios gathering momentum
The Studios business is strongly positioned to
take advantage of increasing demand for quality
content in a UK production market worth more
than £3.3bn, as well as growing international
opportunities. STV Studios comprises of nine
creative labels, all of which have successfully
won commissions since joining the STV Studios
family. The division won a record breaking
30 commissions in 2022 and we have recently
announced that we will beat our target of
quadrupling revenue to £40m by the end of 2023,
so there is real momentum driving us forward.
Regional advertising and the STV Growth Fund
The £30m STV Growth Fund brings new advertisers
to television by making it affordable and accessible,
mainly by match funding advertising campaigns.
Since launch in 2018, we have allocated almost
£20m of funding across 950+ deals, attracting over
300 new advertisers to television for the first time.
Robust balance sheet
The Group was in a net debt position of £15m
at the end of 2022, underpinned by a £60m
revolving credit facility (recently extended to
5 March 2026), providing significant headroom
and financial flexibility. We announced a £30m
investment programme in March 2021, of which
c.75% is aimed at driving the growth in Studios
and Digital. The pension deficit is well managed
with core deficit recovery contributions constant
for the last three triennial valuation cycles (the
most recent being at 31 December 2020).
Sean’s Scotland
Six-part series fronted
by our popular weather
presenter, Sean Batty.
Blood
Irish thriller Blood
dropped on STV Player
as part of a unique
new partnership with
Acorn TV.
Strong cash generation
Our business is highly cash generative with good
overall operating cash conversion. We believe this
cash generation will continue and will enable us
to fully execute our investment programme.
Shareholder returns
We confidently reintroduced a cash dividend
in May 2021, mid-pandemic, and recognise
the importance of paying a sustainable and
progressive dividend. Our approach to setting
dividends is to balance the needs of the business
(for reinvestment), with our pension obligations
and shareholder returns. In setting the level
of dividend proposed, we consider all relevant
factors including macroeconomic and
geopolitical uncertainty, and the proportion
of free cash post pensions that it represents.
We are committed to maintaining a balance
between shareholder return and investment in
our business to continue to deliver the growth
strategy, which is in an exciting phase.
Core values
STV is committed to business integrity, high ethical
values and professionalism in all our activities, and
our social purpose priorities remain an integral
part of our strategy. We are making progress on
diversity across the organisation, driven by our
Diversity and Inclusion Steering Committee and
network of peer groups. We have set ourselves
specific targets for representation from minority
groups and are working towards gender balance in
the top 25% of roles (defined by earnings) by 2023.
Our focus on sustainability has accelerated in 2022
with significant progress on our STV Zero strategy,
setting down our commitment to reduce our
environmental impact and promote climate
action in an accessible way to our viewers. We
are working towards ensuring all programmes
produced at STV meet industry standards for
carbon neutrality and continue to set intermediate
milestones on the road to becoming net zero
carbon by the end of 2030. We are proud
members of Project albert and a co-signatory
to their Climate Content Pledge.
STV Annual Report and Accounts 2022 09
Audience reach
3m per month
STV Studios
30 programme
commissions
STV Player
+10% monthly
active users
Non-broadcast earnings*
%
50
40
30
20
10
0
50%
36%
34%
38%
28%
24%
2018
2019
2020
2021
2022
2023
* Adjusted operating profit
The Travelling
Auctioneers
This STV Studios series was
BBC One’s most successful
daytime launch in 2022.
Celebrity Catchphrase
Fronted by Stephen
Mulhern, the STV Studios
reboot of this classic quiz
show celebrates its 10 year
anniversary in 2023.
OverviewStrategic ReportGovernanceFinancial StatementsAdditional Info 10 STV Annual Report and Accounts 2022
STV business model
Our strategic vision is to transform STV into a digital
streaming and content-led media company, maximising
the value of our linear Broadcast channel while growing
our Digital and Studios divisions to take advantage of
the accelerating market in global video.
Our business model sees us combine our strategic assets
across three interconnected business divisions to create
sustainable, long-term value for all our stakeholders.
Our strategic assets
What we do
We want to deliver high quality
outcomes for all our stakeholders,
and to achieve that we rely on a
number of key strategic assets.
We operate an increasingly
diverse business, generating
value from a number of
different revenue streams:
Our people
People are at the heart of everything we do at STV.
Their creativity, commitment, skills, passion and diversity
are key to our success.
Our brand
STV is a trusted brand continuing to play an important
role in creating value for its stakeholders: as a trusted
news and current affairs partner with a high quality
source of affordable entertainment; supporting its
communities through the STV Children’s Appeal; and
helping to grow Scotland’s creative sector.
Our platforms
We operate the leading marketing platform in Scotland
(STV, channel 3) and broadcaster Video on Demand
platform, STV Player. These combine to give us unique
scale and reach across all demographics, enabling
us to offer bespoke competitive commercial deals
to advertisers and agencies.
Our location
We run Scotland’s largest production company with
bases across Scotland as well as a presence in Northern
Ireland and London and are uniquely well placed to take
advantage of broadcasters’ increased commitments
to Nations and Regions production in the UK.
Our intellectual property
We own, or have access to, the rights of a diverse portfolio
of programmes that are popular across the UK and
internationally.
Our relationships
We have strong relationships with our viewers,
advertisers, commissioners and communities
to deliver value and boost the economy.
Financial capital
We have a strong balance sheet and financial discipline,
which provide us with the capital to invest in medium
to long-term growth initiatives.
Advertising revenue
Commercial partnerships
Programme production
and distribution
Direct to consumer
Supported by
• Creative and inclusive culture that values
honesty, transparency and fairness
• Effective risk management and internal
control frameworks
• Strong principles of corporate governance
We offer bespoke spot advertising and sponsorship
solutions on our linear television channel, STV, and
addressable and programmatic Video on Demand
advertising on our VOD service, STV Player.
We work with TV platforms under a series of
long-term partnerships, as well as with advertisers
to provide a ‘one stop shop’ for advertising services,
extending beyond the sale of advertising to creative
design, post campaign analysis and related activities.
We produce original content for broadcasters
and platform owners in the UK and internationally
from our production bases across the UK. We own
the rights to a library of programmes that we
sell and license to broadcasters and platform
owners internationally.
We directly monetise audiences through on-air
competitions and a paid-for VOD service, STV
Player+, which provides the option to stream
our content without adverts.
STV Annual Report and Accounts 2022 11
Delivering value for
our stakeholders
We respond to the changing needs
of all our stakeholders and create
value for them through efficient
delivery of our business operations.
Audiences
Through a high-quality TV schedule providing the largest
peak time audiences in Scotland for the fourth year running.
Advertisers
Through our unique scale and reach, boosted by the
£30m STV Growth Fund which is aimed at attracting
new advertisers to TV.
Our people
By developing a supportive, open, creative and collaborative
culture; prioritising the safety, mental health and wellbeing
of our people.
Communities
By providing trusted news, facts and information through
the most comprehensive local news and current affairs
service in Scotland; improving on and off screen diversity
to reflect the true face of modern Scotland; raising much
needed funds for families and young people in poverty
in Scotland through the STV Children’s Appeal; supporting
Scottish business to recover from Covid-19 through the
STV Growth Fund; and championing climate action
through STV Zero.
Investors
Continuing to deliver on a growth strategy that generated
the highest adjusted operating profit on record in 2022
together with a progressive dividend for shareholders.
Platforms and partners
Through a range of successful, long-term relationships with
platforms, fellow broadcasters, distributors and suppliers,
through which they share in our success.
Government and regulators
STV delivers on its public service obligations and is working
with stakeholders to create a sustainable future model for
public service media. STV also repaid all furlough monies
in full to Government when it became clear that the
advertising market was recovering successfully.
We offer bespoke spot advertising and sponsorship
solutions on our linear television channel, STV, and
addressable and programmatic Video on Demand
advertising on our VOD service, STV Player.
We work with TV platforms under a series of
long-term partnerships, as well as with advertisers
to provide a ‘one stop shop’ for advertising services,
extending beyond the sale of advertising to creative
design, post campaign analysis and related activities.
We produce original content for broadcasters
and platform owners in the UK and internationally
from our production bases across the UK. We own
the rights to a library of programmes that we
sell and license to broadcasters and platform
owners internationally.
We directly monetise audiences through on-air
competitions and a paid-for VOD service, STV
Player+, which provides the option to stream
our content without adverts.
• Organisation structure built to enable
accountability and autonomy
• Vibrant internal communications
programme to keep our people motivated
and aligned on key strategic goals
• Frequent, transparent and meaningful
engagement with external stakeholders
Advertising revenue
Commercial partnerships
Programme production
and distribution
Direct to consumer
OverviewStrategic ReportGovernanceFinancial StatementsAdditional Info 12 STV Annual Report and Accounts 2022
Engaging with our stakeholders
S.172 statement
In the decisions taken during 2022, the Directors
consider they have acted in the way most likely
to promote the success of STV for the benefit
of its members as a whole, having regard to the
stakeholders and matters set out in S.172 of
the Companies Act 2006.
The Directors, in line with their duties under S.172 of the
Companies Act 2006, act individually and collectively in the
way they consider, in good faith, would be most likely to
promote the success of the Company for the benefit of its
members. In doing so each Director has regard, amongst
other matters, to the:
• likely consequences of any decision in the long term
• interests of the Company’s employees
• need to foster the Company’s business relationships with
suppliers, customers and others
• impact of the Company’s operations on the community
and the environment
• desirability of the Company maintaining a reputation for
high standards of business conduct; and
• need to act fairly, as between members of the Company
STV’s success depends on building and nurturing positive
relationships with its stakeholders that have an interest in
the business and may be impacted by the decisions taken.
STV wants to be a business that provides positive outcomes
for its stakeholders, identified through its strategic planning
process as being employees, customers, shareholders,
suppliers, communities and the environment, Government,
and regulatory bodies. These stakeholders are at the heart of
STV’s business model, strategic priorities, values and culture.
Our extensive engagement efforts help to ensure that the
Board can understand, consider and balance broad, and
sometimes conflicting, stakeholder interests when making
decisions and retain focus on delivering long-term sustainable
value. Stakeholder engagement and analysis is also key to
STV’s approach to risk management.
While the Board will engage directly with stakeholders on
certain issues, stakeholder engagement will often take place
at an operational level with the Board receiving regular updates
on stakeholder views from the Executive Directors and senior
management.
The Directors are supported in the discharge of their duties by
agenda planning for Board and Committee meetings to ensure
there is sufficient time for the consideration and discussion
on key matters, and by processes which ensure the Board is
provided with timely management information from all STV’s
business areas.
The following table provides some insight into how the Board
discharges its duties under S.172 across each of the key
identified stakeholder groups.
Colleagues
Why it’s important to us
• Our colleagues are integral to the success of STV
and so nurturing them is essential
Key priorities of the stakeholder group
• Knowing their voice is heard
• Ensuring everyone is treated fairly
• No compromises on safety and wellbeing, including
mental health
• Regular ‘check in’ opportunities for all colleagues
• Development and career progression
• Alignment between personal and Company values
Engagement with stakeholder group
• Designated employee Director who is STV’s Senior
Independent Director
• The ‘Minute Live’, a weekly, all Company informal discussion
led by the CEO
• Annual employee engagement and wellbeing surveys
• ‘Wellbeing from STV’ programme of activities including
active inclusion networks and Mental Health First Aid
trained wellbeing champions
• Broad range of benefits
Board response
• Commitment to building a truly inclusive culture
• Adopted hybrid working
• Continuous prioritisation of health and wellbeing
• Succession planning for key roles
• Engagement with colleagues across all offices
• Flexible approach to salary reviews and other bonus
and/or one-off payments
Customers
Why it’s important to us
• Our viewers, subscribers, advertisers, and commissioners
are the cornerstone of STV’s continued success
Key priorities of the stakeholder group
• Variety of programming both broadcast and produced
• Availability, cost-effectiveness and reach of linear and
digital channels
• A trusted and impartial news service
• Awareness of key social and topical issues
Engagement with stakeholder group
• Dedicated Viewer Enquiries team
• Customer surveys via ScotPulse
• STV Growth Fund, incorporating the Green Fund and
Inclusion Fund, STV Self Service and the Growth Academy
• Rich variety of content
• Social media
• Market insight into viewing habits
Board response
• Launch of new initiatives – Market Voices and STV Business Spot
• Continued support for STV Growth Fund
• Investment in STV Player-exclusive content
• Recent agreement with ITV to bring extended, exclusive
preview content to Scotland on STV Player
• Investment in new creative labels to fill genre gaps
• Technology roadmap for STV Player reflecting customer
feedback
STV Annual Report and Accounts 2022 13
Suppliers
Community and environment
Why it’s important to us
• Continuity and sustainability of our supply chain is critical
for our long-term success
Key priorities of the stakeholder group
• Timely payment practices
• Open and transparent negotiations
• Compliance with laws, regulations and industry regulators
Engagement with stakeholder group
• ITV/STV Council
• Face to face meetings with suppliers
• Contract performance reviews
Board response
• Strategic oversight of relationship with ITV
• Commitment to fair treatment for all suppliers
Investors
Why it’s important to us
• Investors play a vital role in the success and growth
of STV through provision of funds
Key priorities of the stakeholder group
• Strategy and execution
• Prospects for future growth
• Investment plans
• Returns via dividends and capital appreciation
• Strong ESG practices
• Transparency and openness
Engagement with stakeholder group
• Annual General Meeting
• Capital Markets Days
• Presentations to the retail investor community at Shares
Conference and Investor Meet
• Visits to Company operating premises
• One to one meetings
• Dedicated Investor section of the corporate website
Board response
• Regular communication of performance
• Provision of guidance where appropriate
• Robust business model and medium-term targets
• Sustainability and diversity strategies and targets
Why it’s important to us
• In order to remain relevant to our viewers and advertisers,
we must reflect the communities we serve both on-screen
and off-screen and use our Public Service Broadcaster status
to share important, topical social and environmental issues
Key priorities of the stakeholder group
• Availability of trusted news, facts and insight
• STV Expert Voices – media training
• Support for local causes and community projects
• Supporting local businesses and high streets
• Alignment between corporate and broader social objectives,
including climate action and diversity and inclusion
• Representation through programming, on screen and online
Engagement with stakeholder group
• News and current affairs programming aligned with key
social issues
• Online portal, STV Self Service
• Extension of the STV Growth Fund to the Inclusion Fund
and Green Fund
• STV Growth Academy
• STV Children’s Appeal
Board response
• Launch of new initiative – Market Voices and STV Business Spot
• Continued support for STV Growth Fund
• STV Zero, STV’s sustainability strategy
• Independent Diversity and Inclusion advisor to the Board
and the Group more widely
• Commitment under the Climate Content Pledge with
other broadcasters
Government and regulators
Why it’s important to us
• Active engagement provides STV the opportunity to input
on matters relating to our industry and our business, to
ensure that our voice as Scotland’s leading Public Service
Broadcaster is heard
Key priorities of the stakeholder group
• Compliance with laws and regulations
• Ethical operations and practices
• Creating and sustaining employment
• Investing in the creative industry, providing training and
development opportunities
• Environmental, Social and Governance practices
Engagement with stakeholder group
• Participation in a range of consultations affecting our
industry and business
• Direct engagement with policy makers, e.g. The Department
for Culture, Media and Sport, Scottish Government, Ofcom
• RTS Bursary scheme
• Engagement with Ofcom on the Broadcast Licence
renewal process
• House of Lords lunch hosted by Lord Duncan for STV
• Westminster lunch hosted by John Nicolson
Board response
• Consultation responses to industry matters
• Investment in independent production companies
• Providing direct employment for c.500 people, and
supporting UK freelancer community
• Joint training initiative between STV News and Women
In Journalism Scotland
OverviewStrategic ReportGovernanceFinancial StatementsAdditional Info 14 STV Annual Report and Accounts 2022
Operating review:
Broadcast
2022 saw us win exceptional viewing
shares across a rich schedule of
high-quality network material
and popular, relevant regional
programming on STV, which remains
the most watched commercial TV
channel in Scotland by a considerable
margin. Keen interest in the live event
of the year, the 2022 FIFA World Cup,
alongside reality juggernaut, I’m a
Celebrity… Get Me Out of Here! helped
STV achieve a fantastic 25% viewing
share in November, the channel’s
best-performing month since 2003.
STV continues to have unrivalled reach in
Scotland, reaching 3 million adults each month –
more than any other commercial channel. It also
has a higher daily, weekly, and monthly reach
than all subscription (SVOD) services combined.
STV is the only Public Service Broadcaster in
Scotland to outperform its Network equivalent,
tracking ahead of ITV1 in terms of network share
across all time (+1.4 percentage points) and peak
time (+1.9 percentage points) in 2022.
STV viewers are loyal to our channel, watching us
on average for 1 hour and 48 minutes per day –
longer than any other channel in Scotland. Our
viewing share is more than three times larger
than the nearest commercial competitor,
Channel 4, and STV delivered 96% of commercial
programmes with audiences over 500k in 2022.
This success is down to our popular content
and, for the fourth consecutive year, STV was
the best watched peak time channel in Scotland,
ahead of BBC1. STV delivered 96% of the top 500
commercial programme audiences last year.
The Thief, His Wife
and The Canoe
Based on the extraordinary
story of how prison officer
John Darwin faked his own
death, the drama series was
one of STV’s top performing
programmes in 2022.
Operating review:
Broadcast
Bobby Hain
Managing Director
STV Annual Report and Accounts 2022 15
• STV reaches 3m
adults each month
• 19-year high for
audience share in
Nov 2022 (25%)
• Scotland’s most
popular peak time
TV channel
• Audience bigger than
next nine commercial
competitors combined
High quality shows including soap favourites,
Coronation Street and Emmerdale, and top
dramas Our House and Karen Pirie, were among
our top ten most popular series commanding
significant audiences.
FIFA World Cup 2022
The winter tournament
scored STV a 19-year
viewing share high.
Scotland is a nation of football fans and, whether
our country qualifies or not, we still tune in to
watch in our millions. The FIFA World Cup
tournament in the winter was ‘event TV’ for
the nation, helping score the channel a 19-year
audience share high. The competition was
watched by 7 in 10 people on STV in Scotland
(3.3m) over 4 weeks of thrilling football action.
24 out of the 29 matches on STV outperformed
the UK network, with STV’s viewing share up 3%
on the UK average, and a massive 8 share points
up for Men. The World Cup also delivered the single
biggest programme of the year across all channels
in Scotland, with the Quarter Final featuring
England vs France attracting 1.3m viewers.
Karen Pirie
A six-part crime drama set
in Scotland and based on
novels by crime writer Val
McDermid proved to be a
huge hit with STV audiences.
Our House
A four-part thriller which
got the nation talking and
was one of STV’s top
dramas in 2022.
STV’s peak time audience is
bigger than next nine commercial
channels combined (thousands)
Dave 14
Drama 14
Sky Sports Main Event 16
Film4 17
ITV2 23
E4 27
ITV3 34
Channel 5 63
Channel 4 85
300
STV 300
Next nine commercial
channels 292
Source: BARB, 2022, (18:00-22:30), individuals
OverviewStrategic ReportGovernanceFinancial StatementsAdditional Info 16 STV Annual Report and Accounts 2022
Operating review:
Broadcast
Award-winning news
Quality regional production
News and current affairs are the cornerstone of
our service in Scotland and our award-winning
team produces a first-rate, high quality and
relevant service, including a weeknight show and
bulletins, that is highly valued by our audience.
Our regional productions remain hugely popular
and relevant for our audiences, and we continue
to use our platforms to not only inform and
entertain but to make a positive social impact
in several ways.
Flagship news programme, STV News at Six, has
been Scotland’s most watched news programme
since 2019, reaching 1.4m viewers per month and
providing two separate, tailored programmes in
the north and the central regions. Ofcom’s latest
Nations and Regions report revealed that nearly
one third of people in Scotland use STV News for
news about their own nation, higher than any of
our rivals. This is evidenced by the fact that our
news programme performs 10 share points ahead
of the ITV Network. STV News at Six in the central
region also received industry recognition at the
2022 Royal Television Society Scotland Awards
where it won the Best News Programme accolade.
Following the death of HM Queen Elizabeth II at
Balmoral in September, STV News contributed to
extended and comprehensive coverage of the
events that followed, in the northeast itself, in
Edinburgh and across other events throughout
Scotland. Our resources provided news gathering
for STV’s own output as well as collaborating with
other public service news operators to capture
footage that was seen around the world.
We hold politicians to account and interrogate
the pressing issues of the day in our current
affairs programme, Scotland Tonight, which airs
four times a week – one of these in peak time on
a Thursday evening to make it widely accessible.
We strive to raise awareness of environmental
issues and promote greener lifestyles to as wide
an audience as possible. We do this through our
news and current affairs output, but also via
locally produced programmes like Sean’s
Scotland, a six-part series fronted by our popular
weather presenter, Sean Batty, featuring a strong
focus on sustainability and featuring regions right
across the country.
Our charity, the STV Children’s Appeal, continues
to support children and young people impacted
by poverty in Scotland. This year’s fundraising
brought the total raised since launch to over
£30m. Our Appeal show was fronted by Lorraine
Kelly and Sanjeev Kohli and featured a range of
famous faces, such as Martin Compston and
Ewan MacGregor, and provided a platform for
charities doing incredible work across Scotland.
STV News still the biggest
news programme of the day
In 2022 STV News at Six had a higher
average audience than any other major
news programme for the 4th year in a row
Good Morning Britain
56k
BBC Breakfast
120k
ITV Lunchtime News
59k
BBC News at One
5 News at 5
BBC News at Six
STV News at Six
Reporting Scotland
ITV Evening News
Channel 4 News
250k
27k
310k
382k
340k
310k
53k
The Nine (BBC Scotland)
13k
ITV News at Ten
BBC News at Ten
Sky News Channel*
BBC News Channel*
GB News*
123k
218k
8k
10k
3k
* Average audience across a day (09:30-24:00)
Source: BARB, 2022, (Mon-Fri), individuals
Spotlight
STV Expert Voices
Our STV Expert Voices training initiative is run by our news team, who
are committed to establishing more diversity across the contributors on
our programmes. The team has trained more than 700 people to date,
equipping them with the skills and confidence to tell their story on screen.
Expert Voices won the Diversity Star Performer accolade at the Herald
Diversity Awards in 2022, testament to the hard work carried out and
positive results achieved.
STV’s news team was pleased to achieve its gender and diversity targets
for its output across 2022, with 50% of contributors female and 9% from
an ethnically diverse background. This is a strong result, but we know
there is still much work to be done, and we have plans to raise further
the profile of Expert Voices in 2023.
STV Annual Report and Accounts 2022 17
Flagship news programme, STV News at Six,
has been Scotland’s most watched news
programme since 2019, reaching 1.4m
viewers per month.
STV News at Six
Scotland’s most watched
news programme, reaching
1.4m viewers per month.
RTS Awards
John MacKay and Kelly-Ann
Woodland, presenters of
the central edition of STV
News at Six, won Best News
Programme at the RTS
Scotland Awards.
STV Expert Voices
More than 700 people have
taken part in Expert Voices
media training.
Our one-off documentary, Let’s Talk About
Trauma, saw author Aidan Martin reflect on his
own journey through addiction and childhood
trauma, and profiled three Scottish charities
carrying out life changing work. In the autumn
we aired the mental health campaign, Britain Get
Talking, with a powerful film encouraging adults
to take time to break through to teens to tackle
a growing mental health crisis. In addition to the
on-air campaign, familiar local STV News anchors
delivered this pertinent message to viewers via a
direct appeal on-air and on social media.
Other local programming includes: the successful
return of weekly factual entertainment series,
What’s On Scotland, which brings viewers top tips
on what to watch, visit and see each week, and
performed even more strongly than previous
series; the Pride of Scotland Awards, celebrating
unsung heroes across Scotland; antiques show,
Clear Out, Cash In; vet documentary, Animal 999;
and Hogmanay show, Bringing in the Bells, a warm,
witty look back at the year that has passed.
OverviewStrategic ReportGovernanceFinancial StatementsAdditional Info 18 STV Annual Report and Accounts 2022
Operating review:
Broadcast
Spotlight
STV Growth Fund
The STV Growth Fund was launched in 2018 to make advertising
accessible and affordable to Scottish SMEs and continues to attract more
new advertisers to TV. The Fund was increased to £30m and, since launch
to the end of 2022, we have allocated almost £20m across more than
950 deals with Scottish companies. 2022 saw over 200 deals being done,
and the re-booking rate is high with over 70% of 2022 Growth Fund
members being existing members from the prior year.
Given the turbulent economic backdrop of the past three years, the
Growth Fund and the benefits it offers are more important than ever.
Last year we worked with a range of companies, from a scrap car service
and a provider of mobility and rehabilitation equipment, to a green boiler
company and a luxury hotel, Atholl Palace.
We have also launched important related initiatives. The STV Green
Fund and the STV Inclusion Fund welcome environmentally conscious
and socially inclusive businesses to work with us, and both are key
components of our wider corporate Social Impact strategy.
The STV Green Fund has been live for almost two years. This £1m Fund,
ring-fenced from the wider Growth Fund, is aimed at Scottish businesses
providing sustainable products and services. Not only does the Fund help
them extend their reach, it also encourages Scots to reduce their own
carbon footprint. For example, windows and doors company, Sidey,
are members of the Green Fund and currently recycle 99.3% of all old
windows and doors removed from properties. In their first year of
advertising with STV, the company saw an 80% increase in sales.
In December 2022, we launched the second phase of our gifted
membership award, Inclusion Fund Awards, supporting businesses which
champion diversity and support inclusive growth. This was a very successful
initiative for 2022, with four organisations reporting tangible results from
their campaigns, including significant upturns in website traffic and sales
increases. We’re thrilled to have a new esteemed judging panel on board
to welcome entries from qualifying companies in early 2023.
Our STV Self Service initiative has now been live for a year and helps
make the Growth Fund more accessible for any organisations that might
be apprehensive about TV marketing. Self Service allows advertisers to
design and book their own campaigns online and provides easy access
to our leading marketing platform.
Open for business
The STV Growth Fund
continues to attract more
new advertisers to TV.
Growth Fund membership
On-screen testimonial
from Growth Fund member
Atholl Palace, a hotel in
Perthshire, about the
success of their STV
advertising campaigns.
ScotPulse
A new on-air recruitment
campaign helped boost the
ScotPulse panel to 40,000
members in 2022.
Scotland’s biggest research panel, ScotPulse
Wholly owned by STV, ScotPulse is Scotland’s
biggest research panel and is commissioned to
conduct research by a wide range of businesses
and agencies across Scotland, as well as
supporting STV’s internal requirements. A new
on-air recruitment campaign helped grow the
panel from 33,000 to 40,000. The team supports
STV’s Commercial clients with campaign projects,
well-known direct clients, and research companies
across a wide range of public sector work.
Working with advertisers
Our industry leading sales team works closely with
Scotland’s business community, and we recognise
the key role our advertising platform plays in the
growth of businesses across Scotland. Across the
year, excluding Scottish Government spend, our
STV-controlled regional advertising grew by 18%
year on year, driven by the return of larger clients
across a range of sectors. The STV Growth Fund
continues to attract more new advertisers to TV
and you can read more about this initiative in the
Spotlight section.
We announced two further new initiatives aimed
at helping businesses in Scotland grow, set to
launch in 2023. The first is a free market research
monitor, and the second is an on-air segment
which will shine a spotlight on innovative and
inspiring Scottish businesses.
STV Annual Report and Accounts 2022 19
Spotlight
Public Service
Broadcasting (PSB)
It is a critical time for broadcasting and Nations and Regions production.
We welcome the UK Government’s proposal for a new regulatory
framework to secure the vital contribution of free-to-air Public Service
Broadcasters in the digital age and look forward to the publication of the
new Media Bill in 2023. The Department for Culture, Media and Sport has
recognised the ‘unique relevance’ of STV’s public service contribution,
particularly in Scottish news and current affairs, and the importance of
ensuring our programming is available and easily found on all major
digital platforms, as it is on broadcast, in the future.
Our commitment to our PSB credentials remains paramount and our
social impact is significant. We have strong connections with our Scottish
audiences, the business community and the third sector, and our dynamic
sustainability strategy delivers awareness raising and behavioural change
content to a wide audience.
For PSBs like STV to thrive, continue to deliver for Scottish audiences and
grow our important contribution to a vibrant production sector in Scotland,
we need a new regulatory framework for public service media that preserves
what’s working and positively incentivises the PSBs to invest in the future.
We view the key priority areas as:
• Prominence for PSBs, including nations players like STV, on all digital
platforms, to ensure our content is available, accessible and prominent
on the digital platforms that viewers are increasingly choosing to
access their entertainment.
• Safeguarding free-to-air, high quality, impartial and comprehensive
Scottish and local news.
• Support and stimulus measures to ensure Nations and Regions
production, across all genres, continues to grow.
• A level regulatory playing field between TV and online players,
particularly in relation to advertising regulation.
We will continue to engage with key political and regulatory
stakeholders on these important priorities as the media landscape
continues to evolve rapidly.
Providing a public service
Westminster Editor Kathryn
Samson and the wider
news and current affairs
team are committed to
providing free-to-air, high
quality, impartial and
comprehensive Scottish
and local news.
Like all businesses, STV has not been immune to
the challenging economic backdrop which led to
a decline in the TV advertising market in 2022 right
across the UK. Despite this the Broadcast business
displayed resilience, with total advertising revenue
(TAR) comprising national, regional and digital
advertising only 2% below the record year of
2021 at £110.0m. Overall, divisional revenues
were down 4% on 2021 with operating profit of
£20.7m down 6%. Operating margins have been
broadly maintained at around 22%.
OverviewStrategic ReportGovernanceFinancial StatementsAdditional Info 20 STV Annual Report and Accounts 2022
Operating review:
Digital
Our digital division continues to grow
strongly, delivering record-breaking
numbers in 2022 as we move closer
to our goal of transforming STV
Player from a catch up TV service
to a digital destination. Building
strong connections with our growing
audience is critical for us and we’re
achieving this by regularly adding new
high-quality and must-watch content
whilst working closely with our
platform partners, and continually
updating and improving our product
to ensure a first-rate user experience.
Record breaking performance
2022 saw STV Player breaking all its previous
viewing records. Key to these were two stand-out
pieces of event television: reality juggernaut,
I’m a Celebrity… Get Me Out of Here! became our
most-streamed series (3.4m streams); and the
winter World Cup was our most streamed
sporting event ever (6.4m streams).
Across the year, STV Player delivered its highest
ever viewing figures with viewing hours up 6%
at 54m and streams up 1.5% at 116m. Total
registrations increased by 17% to 4.9m,
extremely close to the 5m target we set
ourselves for the end of 2023. Our total active
registered users – individuals who have signed
up to the service and provided their details –
were up 400,000 over the year.
Changes to the linear peak schedule in March
reinforced the strength of our soaps with the
combined consumption of Coronation Street
and Emmerdale growing 21% to a record high
of over 8m streaming hours across 2022.
A Spy Among Friends
Original drama made
available exclusively on
STV Player in Scotland
starring Guy Pearce
and Damien Lewis.
Operating review:
Digital
Richard Williams
Managing Director
• Record viewing
figures achieved
• Viewing hours up
6% at 54m
• Average monthly
active users up 10%
• Registrations up
17% YOY to 4.9m
• 167 drama box sets
STV Player is available on the web
and across all major platforms
I’m a Celebrity…
Get Me Out of Here!
Series 22 was the most
streamed series of I’m a
Celeb in STV Player history.
STV Annual Report and Accounts 2022 21
Within total registrations, our monthly active
users grew by 10% year on year to 1.1m, with STV
Player VIP users growing 16% (up 24% on streams
viewed). VOD viewing increased year on year in
nine of the 12 months, even with the tough 2021
comparators of lockdown and the UEFA European
Championship.
Our addressable audience is significant, with STV
Player available on all major platforms from Sky
Glass and Freeview, to NOW, ROKU and Samsung.
In 2022, we agreed a new multi-year deal with
Virgin Media to extend our strategic partnership
through to 2028. In Scotland, Virgin Media’s fully
regionalised HD version of the STV broadcast
channel will continue as part of the agreement.
Across the rest of the UK, Virgin Media set-top
boxes (STBs), including Virgin’s new Stream device,
will continue to carry all our drama box sets and
our extensive range of other acquired content.
In December 2022, we agreed an enhanced
strategic partnership with ITV around content
sharing and advertising sales that creates
incremental digital value for both companies
and aligns our interests in the streaming age.
This long-term agreement sees STV Player take
exclusive Scottish rights for an exciting range
of new and original titles and is expected to
encompass over 100 hours of content per
annum, with new shows being added weekly.
The first wave of new titles included UK original
dramas A Spy Among Friends, The Confessions of
Frannie Langton, Nolly (starring Helena Bonham
Carter as the iconic soap star Noele Gordon) and
Litvinenko, starring David Tennant in the title role.
Content strategy delivering
In addition to our stellar network content, we
have continued our successful strategy of adding
high-quality, wide-ranging Player-exclusive
content to complement our Channel 3 offering.
20 content deals were secured, adding 156 new
titles to the Player in 2022. Deals were completed
with international partners including Acorn TV,
Sony Pictures Television, Banijay and All3Media,
boosting our already significant library by 1,000+
hours. Our strategy of constantly adding refreshed
programming for our users, alongside new network
originals, ensures we continue to reinforce our
offering and build our audience base.
Player-exclusive streams declined somewhat
in 2022, down 20%, off the back of more than
doubling the year before.
The top 20 programmes in 2022 on STV Player
included six acquisitions, including police drama,
City Homicide and Australian series, McLeod’s
Daughters as well as Irish thriller, Blood. STV
archive favourites, Taggart and Take the High
Road, continue to hold their own in the top 20.
OverviewStrategic ReportGovernanceFinancial StatementsAdditional Info 22 STV Annual Report and Accounts 2022
Operating review:
Digital
STV Player-exclusive content generated
more than 32m VOD streams across the year,
accounting for 39% of total VOD streams.
Our STV Player Presents initiative sees us
leverage our broadcast channel to premiere
the first episode of new Player-exclusive content,
from which we drive viewers to STV Player to
watch the rest of the series, and we will continue
this successful strategy into 2023. Across the
eleven Player Presents titles in 2022, there was
an average 15-fold increase in streams. Political
thriller, Secret State, was the most successful of
these titles, with a 37-fold increase in streams
following transmission of the first episode on STV.
This content-led approach has helped STV Player
gain recognition across the industry, winning Best
Programme Acquisition for gripping drama, The
Commons, at the Broadcast Digital Awards; and
we were also shortlisted at the Edinburgh TV
Festival for Best Streaming Service.
Commercial growth
Commercial VOD delivery grew across the year,
with total ad impressions up 27% year on year,
driving a 9% increase in VOD revenues. Total
revenue for the division was £19.0m, up 7% on
the prior year. Operating profit also grew year
on year, up 8.0% to £8.5m (2021: £7.9m).
Our new deal with ITV, announced in December
2022, sees ITV’s market leading sales team take
on exclusive responsibility for selling all national
digital VOD and simulcast advertising inventory on
STV Player from 2023, allowing STV to benefit from
ITV’s unrivalled scale in the UK market. As part of
the agreement, STV will also join ITV’s addressable
advertising platform, Planet V, allowing
advertisers to access STV’s inventory alongside
ITV’s combination of mass simultaneous reach
and data-driven, targeted advertising. Planet V is
already used by all the major advertising agencies.
Technical improvements
Our expert team is constantly making updates
to ensure our user journey is as seamless and
enjoyable as possible. This year’s enhancements
included streamlining the onboarding process
for new users, simplifying the navigation, adding
personalised recommendations, and improving
the homepage. We also introduced a dark user
interface across the website. Mandatory
registrations were introduced, which means
we know more about our users and can serve
them targeted advertising.
Spotlight
Drama box sets
High quality international drama is in STV Player’s DNA and, through
a variety of deals with leading distributors, 2022 saw the arrival of 54
new drama box sets to STV Player. Our team has worked hard to cultivate
fruitful ongoing and new partnerships with the likes of Banijay Rights,
All3Media, eOne, Red Arrow and Abacus.
This includes a unique new partnership with Acorn TV, which enables us
to showcase select premium Acorn TV original dramas to viewers across
the UK on STV Player for free. The first AVOD-SVOD endeavour of its kind
in the UK, the collaboration added more high-end drama to STV Player,
whilst simultaneously introducing STV viewers to Acorn TV, as key Acorn
titles formed part of our STV Player Presents initiative. These included
psychological mystery, Blood, starring Line of Duty’s Adrian Dunbar;
and New Zealand drama, The Sounds.
A wide-ranging deal with Sony Pictures Television saw seven new
international drama series added to our service, including the UK debut
of critically acclaimed dystopian thriller The Commons, and all four series
of Michael Sheen-starring period drama, Masters of Sex, a US series which
earned Sheen a Golden Globe nomination.
These high-quality acquisitions hold their own amongst the network
material on STV Player, with Australian series, City Homicide and McLeod’s
Daughters taking the fourth and fifth slots in the top 20 programmes;
and Irish drama, Blood, part of our deal with Acorn, coming in at number
8. The Commons, starring Joanne Froggatt (Downton Abbey, Angela Black)
takes spot number 13 and Irish detective drama, Jack Taylor starring Iain
Glen (Game of Thrones) is number 20.
Competing with soap heavyweights Coronation Street and Emmerdale,
entertainment shows I’m a Celebrity… Get Me Out of Here! and Britain’s
Got Talent, and network dramas like Karen Pirie and The Bay, our acquired
drama titles perfectly complement our wide mix of programming and
prove popular with our audience.
Exciting news for 2023 is our acquisition of long-running soap, Brookside.
The series launched in February and viewers of STV Player can stream the
ground-breaking drama, that originally ran for 20 years on Channel 4,
from the very beginning, with episodes dropping weekly.
Brookside
Licenced in a major deal with
All3Media, Brookside became
the fastest Player-exclusive
series to reach one million
streams one week after
launch in early 2023.
STV Annual Report and Accounts 2022 23
STV Player-exclusive content generated
more than 32m VOD streams across
the year, accounting for 39% of
total VOD streams.
Spotlight
FreeWheel
We’re delighted to have completed switchover
across all 14 platforms from our existing ad
server to industry-leading FreeWheel in 2022,
technology that allows us to monetise premium
content through dynamic ad insertion. This
process ultimately upgraded our advertising
experience across all STV Player platforms
using best-in-class technology and maximises
the value of our content.
STV was the first PSB to introduce Server-Side Ad
Insertion to our streaming video-on-demand
content, which provides a seamless, TV-like
streaming experience. By switching to
FreeWheel and upgrading our apps, we open
STV Player up to the world of programmatic
advertising, introducing new commercial
opportunities to the business. Viewers benefit
from the upgrade by accessing more varied
adverts that load quicker, look smoother and
sound better.
Ultimately, the successful transition to
FreeWheel means that our apps perform
better, we serve adverts more efficiently
and we have access to more in-depth data
for valuable reporting and analysis.
City Homicide
A title from distributors
Banijay, City Homicide was
the most watched Player-
exclusive drama in 2022.
McLeod’s Daughters
Australian family drama
from Banijay is one of
156 new titles added
to STV Player in 2022.
Top 15 VOD programmes by volume and episode
(STV Player-exclusive content highlighted)
Time spent
(hrs)
Total
streams
Streams per
episode
Coronation Street
Emmerdale
I’m a Celebrity… Get Me Out of Here!
City Homicide
McLeod’s Daughters
The Bay
Our House
Blood
No Return
Karen Pirie
Taggart
Take The High Road
The Commons
Trigger Point
The Walk-In
Source: Adobe Analytics & FreeWheel, Jan-Dec 2022
4.3m
3.8m
1.3m
959k
935k
929k
802k
777k
748k
735k
717k
610k
568k
517k
494k
9.8m
11.1m
2.2m
2.0m
2.0m
1.8m
1.5m
1.5m
1.4m
912k
971k
2.1m
1.2m
1.1m
920k
48k
38k
54k
24k
9k
148k
375k
127k
340k
304k
9k
5k
145k
175k
184k
Secret State
Licensed through All3Media,
this political drama aired on
STV as part of the STV Player
Presents series resulting in
a 37-fold increase in streams.
OverviewStrategic ReportGovernanceFinancial StatementsAdditional Info 24 STV Annual Report and Accounts 2022
Operating review:
Studios
STV Studios had another record-
breaking year in terms of commissions
and adjusted operating profit earned.
Our ambitious strategy is to be a
world class producer for the biggest
TV networks and global streamers
and the UK’s number 1 Nations and
Regions production company. In 2022
our growth momentum continued and
an incredible 30 commissions were
won. In excess of £50m of revenue
has already been secured for 2023,
significantly ahead of our target to
quadruple revenues to £40m by 2023
from a baseline of £8.7m in 2020.
Written in the Stars
STV Studios’ first commission
for an international streamer
– the 10-part contemporary
format aired on Discovery+
in winter 2022.
Operating review:
Studios
David Mortimer
Managing Director
• 30 commissions won
• 244 hours produced
• 11 returning series
• £50m+ revenues
secured for 2023
• Nine labels in the
STV Studios family
• Seven antique show
formats
We continue to win new business across drama,
factual and entertainment from the main UK
broadcasters, global streamers and international
buyers, meaning we have been in a consistently
busy period of programme production whilst
continuing to develop and pitch original new
ideas and formats, ensuring a strong pipeline
for the future.
Critically, our teams are delivering high value
returnable drama series alongside high-volume
returning unscripted series, which are significant
contributors to our business growth and are also
important for the development of the creative
industry and talent base in Scotland.
Production partnerships
We are thrilled that we continue to work with a
range of production labels, all of whom share our
values and ambitions and are passionate about
developing new formats and delivering new
productions that put us on the map. We have
different levels of ownership in six independent
production companies (in addition to our three
STV Studios factual
In 2022, the team secured
exclusive access to
internationally-renowned
lawyer, Aamer Anwar, and
his team of criminal law
experts for an eight-part
BBC Scotland commission.
Screw
Production gets underway
on a second series of prison
drama, Screw, at Glasgow’s
Kelvin Hall.
STV Annual Report and Accounts 2022 25
Celebrity Catchphrase
A ratings winner for ITV1,
the successful quiz show
was recommissioned
for two further series for
Saturday night primetime.
in-house labels) and this low-risk strategy
enables us to spread our creative bets, with the
option of increasing our shareholdings in most of
these companies over time. In 2022, we added
a 9th label to the group, Mighty Productions –
founded by the creative team behind daytime
quiz hits like Tipping Point and !mpossible. Every
one of our labels has achieved success in 2022.
A raft of successful shows
There have been many programming highlights
during 2022 across all our divisions:
A second series of our prison drama, Screw, was
confirmed following the success of the first series
which, at the time of broadcast, was Channel 4’s
most successful drama launch since It’s A Sin. The
show, starring Nina Sosanya (His Dark Materials)
and Jamie-Lee O’Donnell (Derry Girls), has just
completed shooting in Glasgow. Our drama team
is currently in advanced development on other
key projects and we look forward to delivering
on our promise of creating a drama-rich
production slate.
Quiz show Bridge of Lies with Ross Kemp, a
commission won through a fiercely competitive
tender process in late 2021, was an instant
ratings success for BBC One’s daytime schedule,
with an average audience of over 1m viewers.
This led to the Entertainment team winning a
recommission for a second and third series, made
up of 25 x 45" episodes for daytime and a special
primetime celebrity series. The latter has
launched strongly on Saturday nights with an
average of 2.7m viewers (17% share). We are in
active conversations about possible international
versions of the show in various territories.
Demonstrating our wide-ranging skills and
capabilities, we produced two significant one-off
investigative documentaries in 2022. What Killed
the Whale? for Channel 4, was presented by
biologist Ella Al-Shamahi, who joined a specialist
autopsy team investigating the death of a
40-foot sei whale in a bid to understand what
is killing the species; and Unvaccinated for BBC
Two saw mathematician Hannah Fry explore
why so many people refuse the Covid-19 vaccine.
OverviewStrategic ReportGovernanceFinancial StatementsAdditional Info 26 STV Annual Report and Accounts 2022
Operating review:
Studios
Our returnable antique-based formats have
seen us produce seven high quality series in
large volumes in 2022 for BBC One, BBC Two,
Really and Channel 5, including Antiques Road Trip
and its celebrity sister version; new commission,
The Great Auction Showdown; and The Yorkshire
Auction House and a celebrity series, plus
off-shoot, The Edinburgh Auction House. An
additional win was The Travelling Auctioneers
for BBC One – the channel’s most successful
daytime launch in 2022 and the BBC’s biggest
daytime factual launch in the last 6 years.
International sales
Tape sales of our extensive programme catalogue
remain very strong with Antiques Road Trip
continuing to sell particularly well especially
in the US following our deal with PBS. We remain
distributor neutral, inviting competitive tenders for
new programmes that we have had commissioned,
enabling us to select the best sales partner for
each new title.
The array of successful commissions across
different genres for multiple broadcasters and
streamers is testament to the talent, determination
and creativity of the STV Studios team and our
like-minded partners, and I’d like to thank them
enormously for their hard work and dedication
across what was a very successful 2022.
Unvaccinated
A timely BBC Two
investigation saw
mathematician
Hannah Fry explore why
so many people refuse
the Covid-19 vaccine.
Spotlight
Production partnerships
Each of our nine labels is distinctive and each
brings something different to the group – and
every one of them has had success in 2022.
This year we extended our exclusive partnership
with scripted producer, Tod Productions, for a
further three years. Tod is owned by highly
respected producer, Elaine Collins, who was
responsible for hit detective drama, Vera, and
BBC One drama, Shetland. This year, alongside
STV Studios they won a major commission for
streamer, AppleTV+, to produce crime thriller
Criminal Record, starring Peter Capaldi and Cush
Jumbo. Tod is also producing a non-broadcast pilot
for Sky Comedy with STV Studios and Sky Studios.
Entertainment supremos, Primal Media, won an
exciting new commission from E4 for a unique
reality TV show, due to air in 2023. The team
are also co-producers on a third series of
award-winning show for BBC iPlayer, Jerk,
starring Tim Renkow.
Scripted producers, Belfast-based Two Cities
Television, produced original new, fast-paced
cop drama, Blue Lights, written by the writers
of The Salisbury Poisonings. The series will air
on BBC One in early 2023.
Our Brighton based label, Hello Mary, followed
up their successful social media-first, younger
skewing format, One Night Stand, with a four-part
commission for E4, and brought The Royals:
A History of Scandals to More4.
Barefaced TV was the first of our labels to win
a commission from a global streamer, with
Discovery+ ordering the brand-new contemporary
format, Written in the Stars, which sees singles
matched by their star signs in this hugely ambitious
10-part series which launched in winter 2022.
In March, we expanded our production portfolio
with the announcement that entertainment
production company, Mighty Productions, would
join the STV Studios family. Two of the creative
brains behind The Weakest Link, they already
produce a raft of series for BBC Scotland and
won a new commission for Channel 4 in 2022
called Sex Rated.
STV Annual Report and Accounts 2022 27
STV Studios programmes commissioned in 2022
Commissioned/confirmed
Screw series 2
Celebrity Catchphrase series 10
Celebrity Catchphrase series 11
Bridge of Lies series 2
Celebrity Bridge of Lies
Antiques Road Trip series 27
Antiques Road Trip series 28
Celebrity Antiques Road Trip series 12
Inside Central Station series 4
Unvaccinated
Celebrity Yorkshire Auction House series 2
Celebrity Yorkshire Auction House series 3
The Yorkshire Auction House series 3a
The Yorkshire Auction House series 3b
The Yorkshire Auction House series 4a
The Yorkshire Auction House series 4b
The Edinburgh Auction House
The Great Auction Showdown series 1
The Great Auction Showdown series 2
STV Children’s Appeal 2022
The Firm (working title)
Criminal Record
Written In The Stars
Jerk series 3
The Favourite (working title)
Sex Rated
Kids’ TV: The Surprising Story
Style Fixers series 2
Five Holes One Goal
The Royals: A History of Scandals
Broadcaster
Channel 4
ITV1
ITV1
BBC One
BBC One
BBC One
BBC One
BBC Two
BBC One Scotland
BBC Two
Discovery/Really
Discovery/Really
Discovery/Really
Discovery/Really
Discovery/Really
Discovery/Really
Discovery/Really
Channel 5
Channel 5
STV
BBC Scotland
Apple TV+
Discovery+
BBC Three
E4
Channel 4
BBC One
BBC Scotland
4 Digital
More4
Bridge of Lies
Hit quiz show sees
teams of contestants
competing for cash by
crossing a bridge made
up of stepping stones
across the studio floor.
Inside Central Station
Taking viewers behind
the scenes of Scotland’s
busiest train station. In
2022, after four series, the
programme moved from
BBC Scotland channel to
BBC One Scotland.
Criminal Record
Tod Productions alongside
STV Studios have
co-produced on this major
commission for streamer,
AppleTV+, starring Peter
Capaldi and Cush Jumbo.
OverviewStrategic ReportGovernanceFinancial StatementsAdditional Info 28 STV Annual Report and Accounts 2022
Operating review:
Studios
the format including a third and fourth series
of The Yorkshire Auction House, two celebrity
versions and a brand-new spin-off series, The
Edinburgh Auction House. This bumper 58-episode
order includes celebrity shows featuring Anneka
Rice, Sid Owen and Jennie Bond.
The Travelling Auctioneers was commissioned
in 2021 and saw Will Kirk (The Repair Shop) and
auctioneering expert Christina Trevanion (Bargain
Hunt) join forces. The duo took their auction house
and workshop on the road, unearthing hidden
gems to repair and then sell across a 15-episode
run. The series had an average audience of 2m
and a 22% share, up an incredible 51% on the
slot average for BBC One.
Boosting our reputation in the antiques space was
the significant commission from Channel 5 of 80
hour-long episodes (2 x 40 ep series) of The Great
Auction Showdown, which sees much-loved
antique dealer, Paul Martin, go head-to-head with
a guest rival expert as they compete to make the
most at auction in this fun yet fiercely competitive
new format. It is due to make its debut in the
Channel 5 schedule in the first quarter of 2023.
Great Auction Showdown
A new series for 2023
will see celebrity antique
dealer Paul Martin going
head-to-head with a rival
expert in a number of
entertaining ‘challenges’
before auctioning their
goods each day.
Spotlight
Antiques formats
Our reputation for creating enjoyable
entertainment shows based around antiques
has been an important driver in our returning
series strategy, not only boosting our numbers,
but also supporting the freelance production
community across Scotland and the rest of
the UK. Our formats include Antiques Road
Trip, Celebrity Antiques Road Trip, The Travelling
Auctioneers, The Yorkshire Auction House,
Celebrity Yorkshire Auction House, The Edinburgh
Auction House and The Great Auction Showdown.
Our expertise in this area has delivered an
incredible 1,840 transmissions of STV Studios
antiques programmes across five channels this
year, including BBC One, BBC Two, Quest, Really
and HGTV, reaching 29.9m people across the UK.
Our antiques series in more detail:
We have produced 26 series of Antiques Road Trip
and 11 series of the celebrity version for the BBC to
date. A staple of the BBC’s daytime schedule with
an army of loyal fans, we produce the show out of
our Glasgow HQ, with teams travelling the length
and breadth of the country to feature a huge
range of antiques fairs and auction houses. We’ve
built up wonderful working relationships with the
UK’s finest antiques experts, who are household
names across the country. Antiques Road Trip
regularly pulls in over a million viewers – all 25
series of the original version that have aired so
far have had an average audience over 1 million.
The Yorkshire Auction House for Discovery-owned
channel, Really, was the channel’s most watched
programme of the year in 2022, followed by
the celebrity version of the series which was
the second most watched programme on
the channel. Testament to its popularity and
Discovery’s long-term commitment to the format,
the channel ordered six new series based on
Antiques Road Trip
Antiques Road Trip and
its Celebrity sister series
continue to be a staple
ratings winner for the
BBC and a strong returner
for STV Studios.
STV Annual Report and Accounts 2022 29
Our expertise and reputation in creating
high performing antiques formats has
boosted our returning series in 2022
and this looks set to continue.
The Travelling Auctioneers
Sees restoration maestro Will Kirk and
auctioneering expert Christina Trevanion
take their auction house and workshop
on the road across the UK turning
unwanted items into winning lots.
STV Studios seven antiques
formats in 2022:
• 1,840 transmissions
• Across five channels
• Reaching 29.9m
across the UK
• Two new formats
commissioned
• Seven series in
production
The Yorkshire Auction House
In 2022, STV Studios received a bumper
recommission from Really for six new
series including an Edinburgh spin-off
and celebrity series.
Celebrity Antiques Road Trip
A staple of BBC Two’s schedule since
2011, antiques experts accompany
celebrities on a road trip around the UK
searching for treasures and competing
to make the most money at auction.
OverviewStrategic ReportGovernanceFinancial StatementsAdditional Info 30 STV Annual Report and Accounts 2022
Finance review
For the year ended 31 December 2022
Lindsay Dixon
Chief Financial Officer
Results summary
Adjusted results*
Advertising revenue (£m)
Total revenue (£m)
Operating profit (£m)
Operating margin
Profit before tax (£m)
Earnings per share (p)
Statutory results
Total revenue (£m)
Operating profit (£m)
Profit before tax (£m)
Profit after tax (£m)
Effective tax rate
Earnings per share (p)
2022
2021
110.0
137.8
25.8
18.7%
24.1
42.3
137.8
25.3
22.2
17.3
22.1%
38.3
112.6
144.5
25.2
17.5%
23.6
45.6
144.5
21.6
20.1
19.4
3.5%
42.7
* Refer to note 27 in the Notes to the financial statements.
The Group has delivered another
strong financial performance in 2022,
building on the momentum in Digital
and Studios from previous years.
Despite an increasingly challenging
advertising market over the second
half as a result of the macroeconomic
and political uncertainty, the Group
has reported its highest ever adjusted
operating profit.
Trading overview
Total revenue for the year was £137.8m (2021:
£144.5m), down 5% as a result of lower advertising
and Studios revenues year on year. Excluding the
ELM revenues from 2021, relating to the lottery
business disposed of in August 2021, total
revenues were 4% down year on year.
Total advertising revenue (TAR) was £110.0m (2021:
£112.6m), a decrease of only 2% on the record
2021 performance, despite significant economic
uncertainty particularly in the second half of the
year. After a first half which saw TAR grow by
4% year on year, the third quarter was more
challenging as the interest rate and inflationary
environment took hold and consumer confidence
was impacted by the cost-of-living crisis. Q4 was
stronger than Q3, boosted by the advertising
opportunities associated with hit entertainment
shows like I’m a Celebrity… Get Me Out of Here! and
the FIFA World Cup, however the Q4 performance
wasn’t sufficient to offset Q3 declines, and TAR fell
in H2 by 7% overall. Revenues in Studios were lower
as the timing of drama deliveries in particular
impacted revenue recognised in the year.
Notwithstanding the tough macroeconomic
backdrop, adjusted operating profit increased
by 2% to £25.8m (2021: £25.2m), equivalent to
an operating margin of 18.7% (2021: 17.5%). On a
statutory basis, operating profit increased by 17%
to £25.3m (2021: £21.6m). Improved operating
profit on the record results achieved in 2021
demonstrate the continued resilience of our
business, the benefits associated with delivery
of our diversification strategy, and close
STV Annual Report and Accounts 2022 31
Improved operating profit on the record
results achieved in 2021 demonstrate
the continued resilience of our business.
management of costs. For the financial year,
the proportion of Group profits derived from
non-broadcast earnings was 38%, compared
to 36% achieved in 2021, with the absolute
quantum of Digital and Studios operating profit
also increasing year on year.
The Broadcast division generated an operating
profit of £20.7m (2021: £21.8m), a decrease of
5% on the prior year. This result was largely
driven by the decline observed nationally in the
TV advertising market and to a lesser extent in
regional advertising, the latter being impacted
by lower levels of covid-related Scottish
Government spend in 2022 relative to the prior
year. Our arrangement with ITV meant that our
contribution to the national programme budget
decreased by the same percentage as national
advertising revenue, protecting the division’s
operating profit margin.
The Digital division generated operating profit of
£8.5m (2021: £7.9m), an increase of 8% on 2021,
driven by VOD revenue growth of 9% in the year.
We continued investment in our third party
content strategy during the year, culminating
in the agreement reached with ITV in December
to secure exclusive access to original, premiere
content in Scotland for STV Player. Our increasingly
strong relationships with platform partners,
combined with a growing library of quality
content, has delivered an increase in monthly
active users and consumption growth year on
year, with registered users surpassing our 5m
target a year early.
In Studios, 2022 was a year encapsulated by
delivering on the record number of commissions
won previously and considerably strengthening
our pipeline for the future. Revenue for the year
was £23.7m (2021: £26.6m), with notable
deliveries including Written in the Stars (for
Discovery) and Bridge of Lies (for the BBC).
Production of Criminal Record (for Apple TV+)
and our returning prison drama Screw (for
Channel 4) were well advanced at the balance
sheet date. The production activity associated
with Criminal Record has been funded directly
by Apple throughout the process however due to
the scale and direction of the production activity
relative to other ongoing projects, the impact on
the balance sheet is a material increase in both
programme production work in progress and
contract liabilities, which broadly offset. 2023
will be a breakthrough year for the division with
revenue of £50m+ for commissions secured for
delivery already confirmed, significantly ahead
of our target to quadruple revenues to £40m
by the end of 2023. The division generated
operating profit of £1.4m (2021: adjusted
operating profit of £1.3m).
Adjusted profit before tax was £24.1m (2021:
£23.6m) after charging finance costs of £1.6m
(2021: £1.5m). These comprised interest on the
Group’s borrowings of £1.1m (2021: £1.2m) with
the balance being non-cash costs in relation
to the Group’s lease liabilities. These adjusted
results are before finance costs in relation to
the Group’s legacy defined benefit pension
schemes and exceptional items. The prior year
includes High-End Television (HETV) tax credits
receivable. Statutory profit for the year was
£17.3m, a decrease of £2.1m on 2021 (£19.4m)
and mainly driven by an increase in deferred
tax charged. A full reconciliation of statutory
to adjusted performance measures can be
found in note 27 to the financial statements.
Costs – inflation and mitigation
Like many businesses across the UK, 2022 has
seen an inflationary backdrop with the main
areas of impact for the Group being salaries
and energy costs. The direct impact on 2022
has been limited for the reasons set down
below; the extent to which 2023 is impacted
will depend on commodity prices and broader
market conditions and our ability to mitigate.
As far as salary inflation is concerned, the Group
operates a salary year in line with its financial
year, and so the principal salary inflation awards
will be effective from 1 January (2023) rather than
impacting 2022. That said, as explained in the
principal risk identified in relation to recruitment
and retention of staff (see page 40), there is high
demand for both Studios and Digital staff at
present which is having the effect of increasing
both freelancer and permanent salaries. As far
as we can, we seek to mitigate these increases
through other savings.
OverviewStrategic ReportGovernanceFinancial StatementsAdditional Info 32 STV Annual Report and Accounts 2022
Finance review
For the year ended 31 December 2022
From 1 January 2023, the Group awarded an
average pay award of 5.5% across all employees.
This was structured as a fixed award of £2,000
for each eligible individual, thereby providing the
greatest support to those team members on the
lowest salaries and for whom the currently high
cost of living is most difficult.
On energy, the Group benefitted from fixed
rate contracts for gas throughout the year,
and for electricity to 30 September. While higher
costs were incurred over Q4 2022, these were
mitigated in part by the relief introduced by the
UK Government. That relief is expected to be
removed from 1 April 2023 and so costs beyond
that point will be driven by commodity prices
alone. The Group’s fixed rate agreement for
gas is in place until Q1 2024.
We do not anticipate being able to offset all
inflationary cost increases in 2023, particularly in
a recessionary environment. However, the Group
is undertaking a detailed exercise to identify
savings and other efficiencies with the intention
of offsetting as much as possible, without
impacting the medium to long term health
and success of the business.
Cash flow and net cash
The Group has in place a 3-year £60m revolving
credit facility, with £20m accordion, that has been
extended to March 2026 through the exercise of
two 1-year extension options. The key financial
covenants under this facility are leverage (the
ratio of net debt to Adjusted EBITDA) and interest
cover, which must be less than 3 times and more
than 4 times respectively.
At the balance sheet date the Group had net debt
of £15.1m compared to a small net funds position
of £0.3m at the start of the year. This position
reflects the unwinding of the working capital cash
inflow in 2021, and the short-term requirements
of a growing Studios business. In addition, we
invested £0.9m in Mighty Productions in Q1 2022
and have provided a £3.0m production financing
facility to Two Cities (of which £2.4m was drawn
in the year) to support the production of Blue
Lights for the BBC. This production financing
facility matures in the first half of 2023. The
Group’s operating cash conversion was 45% in
the year (2021: 161%). Given the extent of the
reversal of working capital in the current year,
it’s more relevant to look through the short
term timing differences and consider both years
taken together – on this basis, operating cash
conversion was 98%.
At the end of the year, the Group’s leverage was
0.5 times (2021: nil) and interest cover was 42.8
times (2021: 49.4 times), both metrics well within
the covenant limits.
Movement in net debt
1 January 2022 – net cash
EBITDA
Working capital incl. leases
Share based payments
Capital expenditure
Interest and corporation tax
Defined benefit pension schemes
Production finance to associates
Investment in associates
Dividends paid
31 December 2022 – net debt
£m
0.3
30.1
(21.2)
0.8
(3.9)
(0.9)
(11.9)
(2.4)
(0.9)
(5.1)
(15.1)
Update on £30m investment plan
Since we announced our investment plan in March
2021, we have invested £17.9m across capital
equipment, investments in Studios, and operating
expenditure in Digital and Studios (principally
across creative and digital development, and third
party content and marketing for STV Player). Of this
total investment to date, £8.5m was invested in
2021 and £9.4m in 2022. We are on track to invest
in line with our plan by the end of 2023, although
continuously review investment decisions based
on alternatives available, the current climate,
and anticipated returns.
Non-statutory measures
This Annual Report includes both statutory
and non-statutory (or adjusted) performance
measures, the latter intended to exclude
significant, non-recurring items from the results
for a period, and enable the users of the financial
statements to compare performance across
financial years on a like for like basis. The
combination of these statutory and adjusted
measures is useful to investors as it provides
them with a basis for measuring our operational
performance. The non-statutory measures
should not be considered in isolation from, or as a
substitute for, financial information in compliance
with GAAP, and the non-statutory measures
used in this Annual Report may not be directly
comparable with similarly named amounts
reported by other companies.
STV Annual Report and Accounts 2022 33
Earnings per share (EPS)
Adjusted EPS (before exceptional items and
excluding IAS19 interest) at 42.3p was down
7% on the prior year and on a statutory basis
EPS was down 4.4p to 38.3p. The reduction in EPS
under both measures is a result of the deferred
tax charge incurred in relation to the defined
benefit obligations. The deficit on the Group’s
defined benefit pension schemes has significantly
reduced year on year which also results in a
reduction in the related deferred tax asset, part
of which drives a deferred tax charge in the
Consolidated Income Statement. A reconciliation
of statutory to adjusted EPS is included in note 9
to the financial statements.
Pensions
The Group has two defined benefit pension
schemes, both of which are closed to new
entrants and only one of which has a small
number of active employees. The IAS 19
accounting deficit across both schemes was
£63.1m at the end of the year (2021: £79.4m).
The decrease in the liability is primarily driven
by an increase in discount rates over the period
due to the increase in corporate bond yields
and payment of deficit funding contributions.
Dividends
The Board is recommending a final dividend of 7.4p
per share resulting in a total dividend of 11.3p for
the year, an increase of 3% on 2021. If approved
at the Annual General Meeting on 27 April 2023,
the final cash dividend will be paid on 26 May 2023
to shareholders on the register as at 14 April 2023.
Lindsay Dixon
Chief Financial Officer
In calculating the adjusted measures of operating
profit, profit before tax and EPS, the Group excludes
exceptional items (as well as the tax charge or
credit on those amounts), and IAS 19 finance
costs, and reflects High-End Television (HETV)
tax credits as contributions to operating costs.
Exceptional items are items of income or expense
which, because of the nature, size and/or
infrequency of the events giving rise to them, are
considered to be one-off and do not necessarily
directly relate to the underlying trading of the
Group. HETV tax credits receivable relate to
premium programme production activity. These
items are included to reflect performance in a
consistent manner and in line with how the
business is managed on a day-to-day basis. IAS
19 finance costs are excluded from non-statutory
measures as they are non-cash items that relate
to historic defined benefit pension schemes.
Exceptional items
In early December 2022, STV broadened its
contractual arrangements with ITV to secure
exclusive rights in Scotland to original, premiere
content for STV Player. The agreement also saw
STV appoint ITV as its exclusive agent for national
VOD sales. Pre-tax exceptional costs of £0.5m
were incurred, principally relating to redundancy
costs associated with the outsourcing of VOD
sales, as well as legal costs associated with
agreeing the binding Heads of Terms (HoT). The
Group has agreed to further cash payments that
are expected to be incurred in 2023, estimated
at c.£3.0m, which relate to various fees agreed
in principle under the HoT and further legal costs
to agree Long Form Agreements.
Corporation tax
A total tax charge of £4.9m has been recognised
in the year (2021: £0.7m). This comprises a tax
charge on profits before adjusting items of £5.0m
(2021: £2.9m), a tax credit on exceptional items
of £0.1m (2021: £0.3m) and £nil credited for HETV
tax credits (2021: £1.9m).
The total tax charge of £4.9m on profit before
tax of £22.2m represents an effective tax rate
(ETR) of 22.1%. The ETR in 2021 was much lower
at 3.5%, driven by the HETV tax credit receivable
and an increase in the rate that deferred tax was
measured at. The tax charge on profits for the
year is greater than the standard rate of tax due
to deferred tax charged in relation to defined
benefit obligations. The Group paid £1.0m in
corporation tax (2021: paid £1.2m) which was
offset by £1.2m received in regard to HETV tax
credits accrued in the prior year with the balance
of £0.5m received post year end.
OverviewStrategic ReportGovernanceFinancial StatementsAdditional Info 34 STV Annual Report and Accounts 2022
Risk management
STV operates in a rapidly evolving environment
where effective risk management is fundamental
to the achievement of our strategic objectives.
The Board determines its appetite for risk across several key
risk areas and determines the relative level of risk that the
Group is prepared to accept in the pursuit of these strategic
objectives. A risk management framework is in place which
underpins our approach for the identification, assessment, and
management of risks, and for their continual monitoring and
review. This is formally documented in the form of a Group risk
management policy, which also provides clarity for where the
responsibility for risk management sits within our governance
structures. This policy is shared with all colleagues at STV and
is a key building block of the culture of risk management that
has been embedded throughout the organisation.
Responsibility for risk
The key roles and responsibilities for risk management comprise
three layers. Each role within the Group is well-defined with
clear responsibilities and a transparent reporting structure.
The first line of defence is comprised mainly of our divisional
management teams and central function heads who are
responsible for identifying and managing risk as part of
their accountability for achieving strategic objectives.
Taken together, they have the necessary knowledge, skills,
information and authority to operate the relevant policies and
procedures of risk control and ensure compliance with Group
policies and standards throughout their division/function. This is
underpinned by an understanding of the Company, its objectives,
the environment in which it operates, and the risks it faces.
Our second line of defence comprises the range of functions
that oversee and/or specialise in compliance and management
of risk, including Group Finance, IT, HR, Compliance, Legal,
and specialist teams in relation to cyber security, GDPR and
regulatory compliance. These functions report directly to
members of the Management Board which has overall
responsibility for managing the Group to ensure it meets its
strategic objectives. The second line of defence provides the
policies, frameworks, tools, techniques, and support to enable
risk and compliance to be managed in the first line, conducts
monitoring to assess how effectively it is being carried out, and
helps ensure consistency of definitions and measurement of risk.
The third line of defence comprises internal audit, the principal
function providing independent assurance to the Group. Sitting
outside the risk management processes of the first two lines of
defence, its main roles are to ensure that the first two lines are
operating effectively and advise on how they could be improved.
The internal audit plan is set by the Audit & Risk Committee
and provides an evaluation of the effectiveness of governance,
risk management and internal control. A full description of the
scope of internal audit in 2022 and engagement with the Audit
& Risk Committee is given in the Report of the Audit & Risk
Committee on pages 68 to 71.
The Audit & Risk Committee reviews the Company’s internal
financial controls and internal control and risk management
systems annually, as delegated by the Board, and reports to the
Board on how it has discharged its responsibilities. The Board
undertakes an annual review of the Risk Appetite Statement,
which is then shared across the organisation and forms a key
part of the risk management process.
Risk assessment process
STV’s approach to risk management combines a top-down
strategic view supported by a bottom-up operational risk review.
The strategic view, led by the Board, involves an assessment
of the external environment in which the Group operates to
evaluate both the current and emerging risks the Group faces in
pursuit of its strategic objectives, and to reflect on any changes
required to those risks previously identified as principal risks.
Through its annual agenda of activities, the Board undertakes
a robust assessment of new and emerging risks, which includes
the following: (i) detailed discussion with each of the divisional
management teams as to the risks surrounding operational
matters and achievement of longer-term goals and objectives;
(ii) review and consideration of wider trends beyond the
Company’s market sector, supported by insights from third
parties (horizon scanning); (iii) annual update from the
Company’s pension advisers on evolving practice and regulation
in relation to defined benefit pension schemes; (iv) regular legal
and regulatory reports from in-house Legal and Compliance
teams; and (v) engagement with brokers, the internal and
external auditors, and other advisers as appropriate.
The bottom-up approach, led by the divisional and central
function management teams, involves the identification,
management and monitoring of risks in their respective area of
the business on a continual basis and is formally documented
in a risk register. The Group operates individual risk registers for
each of its operating divisions, the central functions/corporate
matters, climate-related matters, and cyber.
For each risk identified, standardised grading is used to support
the measurement of impact and likelihood, which together
provide a quantitative view of the gross risk. This scoring
matrix, which considers risk by reference to both quantitative
financial and qualitative attributes and the probability of
occurrence, allows for comparability and consistency of risk
measurement across the Group. Risks are then re-assessed
based on the strength and effectiveness of existing mitigating
controls and an appropriate risk response is determined in line
with the Group’s risk appetite. Each risk is assigned to a risk
owner who is responsible for ensuring associated mitigating
controls are operating effectively and for monitoring that the
net risk continues to be within the tolerance levels of the
Board-agreed risk appetite.
Risk registers are live documents and are continuously
reviewed and updated as appropriate. Divisional registers are
formally tabled for discussion at divisional board meetings at
least quarterly. Central function risk registers are reviewed by
the Head of the associated central function at least quarterly.
Risks deemed to be the most significant in the context of their
potential to impact achievement of the Group’s strategy are
reflected in the Group risk register and reported to the Board.
The Group risk register is a combination of operational and
emerging risks identified through the divisional and central
function risk registers and new and emerging strategic risks
identified by the Board through its annual horizon scanning
exercise and ongoing evaluation of the external environment
that the Group operates in (as described above).
The Audit & Risk Committee has delegated authority from
the Board to review the effectiveness of the Group’s risk
management and internal control systems, which it does at least
annually. It performs an annual assessment of the effectiveness
of the risk management and internal control frameworks
through review of the Group risk management policy and how
it has been implemented during the year, and evaluation of
reports from the internal and external auditors and reports
to the Board on the outcome of the work performed.
STV Annual Report and Accounts 2022 35
Risk governance structure
Board
• Sets strategic objectives
• Evaluates and monitors identified principal risks and
uncertainties, including potential impact on achieving
agreed strategic objectives
• Horizon scan for emerging principal risks
• Determines risk management policy, including risk appetite
Management Board
• Reviews divisional and central function risk registers
quarterly and documents the most significant risks
in the Group risk register
• Considers whether there are any other risks that need
to be captured in the risk registers
• Challenges risk scoring and effectiveness of controls
and monitors compliance with risk appetite thresholds
• Bi-annual reporting on principal risks and related
mitigations to the Audit & Risk Committee
• Regular reporting on implementation of action points
raised by internal audit
Audit & Risk Committee
• Evaluates and monitors key risks (those on the
Group risk register), including potential impact
on achieving agreed strategic objectives
• Advises the Board on principal risks and mitigations
• Sets internal audit plan to gain independent
assurance over the effectiveness of key risks
and mitigations
• Reviews internal audit reports and management
responses to identified action points
• Details of the reviews undertaken by the
Audit & Risk Committee during the year are
disclosed in the Governance section of this
report on pages 69 to 70
Internal audit
• Provides independent assurance on risk areas
set out in the internal audit plan, to assess
operating effectiveness of mitigating controls
and suggest remediation activities
Divisional Board
• Identifies risks and associated controls
specific to division
Central and specialist functions
• Identifies risks and associated controls relating to central
functions, cyber security, data security and compliance
• Quantifies gross and net risk scoring and
• Quantifies gross and net risk scoring and allocates
allocates a risk owner for continuous monitoring
a risk owner for continuous monitoring
• Reviews operating effectiveness of mitigating
• Reviews operating effectiveness of mitigating controls
controls
OverviewStrategic ReportGovernanceFinancial StatementsAdditional Info
36 STV Annual Report and Accounts 2022
Risk management
Risk appetite
Appetite for risk is considered by the Board across several key risk areas that are business critical and could materially
impact upon the Group’s ability to achieve its strategic goals if a disproportionate level of risk to expected reward is taken.
The Group uses four categories in determining risk appetite based on a quantitative measurement of likelihood and impact.
Key
Averse
Avoidance of risk and
uncertainty is a key
organisational objective.
Cautious
Preference for options that
have a low degree of inherent
risk and may only have limited
potential for reward.
Open
Willing to consider all options and
choose the one that is most likely to
result in success while also proving
an acceptable level of reward.
Actively seeking
Eager to pursue options
that provide the greatest level
of reward, despite the higher
level of inherent risk.
These are applied across the following key categories:
Risk and opportunities
Averse
Cautious Open
Actively
seeking
Reputation
Strength of brand is vitally important in the markets that STV operates in. The Group
places great importance on upholding its reputation and therefore has a low appetite
for risk in engaging in any activity that could lead to undue adverse publicity or could
lead to a loss of confidence by the Scottish and UK political establishments, regulatory
bodies or by its shareholders and other stakeholders.
Legal and Regulatory
The Group is a compliant organisation and will not tolerate breaches of regulations
in pursuit of its objectives. Existing legal and compliance frameworks are rigorously
respected and explicitly followed.
Information Security & Cyber
The Group has no tolerance for material cyber security incidents which impact our ability
to operate as a business, damage our reputation or lead to financial penalties.
People & Culture
The inability to recruit, develop and retain talent with the appropriate skills, knowledge
and experience would compromise our ability to deliver our strategic plans. The Group
is committed to building a diverse and inclusive culture and through its Open Access
Charter, has a strategy in place to ensure it represents the communities it serves.
It considers equality, diversity, dignity and respect to be of paramount importance,
together with employee development and the health and safety of employees. It has
no appetite for any deviation from its standards in these areas.
Returns & profitability
The Group aims to deliver strong growth through the strategic options it identifies,
ensuring that these are for appropriate returns, with a focus on market median
margins (as a minimum target), clear return on investment and good working capital
management together with cash generation. While opportunities may be taken that
result in some dilution to the operating margin in the short term, these would be
expected to generate margin enhancing results within the 3 year plan period.
Liquidity
The Group is prepared to use leverage in pursuit of achieving its strategic objectives
and will utilise the funds available to the Group from its revolving credit facility, subject
to maintenance of significant headroom in the associated financial covenants and
sufficient capacity to meet defined benefit pension obligations.
Strategic partnerships
The Group will actively pursue merger & acquisition, joint venture or other
collaboration opportunities that are aligned with its strategic direction towards
creating sustainable value, subject to meeting its investment criteria.
Technology & innovation
The Group will actively pursue opportunities to invest in its broadcast technology and
development of its digital platform with a view to enhancing reliability and the viewer
experience and maintaining relevance compared to other market participants.
Operational
The Group has a low appetite for taking risks that may lead to significant disruption
of our operations. We seek to minimise the risks from unforeseen operational failures
in our business but acknowledge that some are outwith our control.
Corporate sustainability
The Group considers the impact its operations have on the environment and actively
pursues opportunities to reduce its carbon footprint in order to become a net zero
carbon business by 2030. The Group has a low appetite to engage in any activities
that could impact progress towards this strategic goal.
Principal risks and uncertainties
As in any business, there are risks and uncertainties that could
have an impact on the Group’s operating results, financial
condition and prospects. The Group’s risk management and
assurance framework is designed to make this less likely by
clearly identifying and seeking to mitigate key risks. The Board
takes seriously its responsibility to ensure the systems and
processes in place are robust, effective and take account of such
risks, but acknowledges that they cannot eliminate all risks.
The risk management framework and underlying processes
in operation throughout the year have been described in the
Risk Management report on pages 34 to 36. These processes
underpin the identification and assessment of principal risks
as set down on the following pages.
The Directors confirm they have carried out a robust
assessment of the Company’s emerging and principal risks
facing the Company and that the risks identified have been
fully evaluated and taken into account in preparing the
budgets and forecasts which support going concern, the
viability statement and impairment assessments. The principal
risks and uncertainties set out below are those believed to
have the greatest potential to impact our ability to achieve
the Group’s strategic objectives, or which have the greatest
potential impact on the Group’s solvency or liquidity.
STV Annual Report and Accounts 2022 37
Regulatory environment
Risk category: Legal and regulatory
Risk trend: No change
Link to strategy: Maximise Broadcast
Potential impact
STV’s linear broadcast business is operated under Channel 3
licences that are regulated by Ofcom, and that have a term
that runs to the end of 2024. These Channel 3 licences contain
conditions around contribution to public service broadcasting,
programme production and compliance with Ofcom’s codes. In
the event of any serious or repeated breaches, Ofcom has powers
to impose sanctions on licensees including, in the most extreme
circumstances, financial penalties or revocation of licences.
Separately from compliance, changes to policy and regulation
or a failure by the UK government to regulate may have a
negative impact on the future of our public service broadcast
(PSB) licences, our business model and/or the cost of operations.
PSB regulation needs reform to respond to changes in viewer
behaviours and the increasing scale of digital media companies.
The upcoming Media Bill may have a significant impact on our
business model and operations, in particular in the event of a
reluctance by government to intervene on key issues (such as
fair value, prominence, and the influence of digital players).
The Channel 3 licence renewal process has started and is
running concurrently (although independently) with Ofcom’s
Public Service Media review.
How we manage it
As licensee, it is STV’s responsibility to ensure that the terms
of these licences are adhered to, and measures have been put
in place internally to ensure this happens. There is a dedicated
compliance function, and a compliance mentality has been
embedded across all relevant areas of the business, with
regular staff training undertaken. There is frequent contact
with the regulator to ensure awareness and understanding
of any updates or changes to the codes/rules and that
appropriate changes to internal processes are implemented
as required. STV makes formal submissions to the Regulator
in response to all open consultations to ensure matters of the
most significance to the Group are presented to policy makers.
We also collaborate with other organisations in our industry,
where appropriate and where individual objectives are aligned.
Specifically, during 2022 we made a submission to Ofcom in
support of its s.229 report to the Department for Culture,
Media and Sport Secretary of State; Ofcom’s recommendation
was to renew (without tender) the Channel 3 licences. While
this is a positive development, we still await the Secretary of
State’s decision on the matter of licence renewal and there
remains uncertainty around the progress of the Media Bill.
Therefore we consider the risk trend to be the same as 2021.
Governance and oversight
The Broadcast board meets monthly and is chaired by
Bobby Hain, MD of Broadcast. It is attended by both Executive
Directors, the Group Commercial Director, Legal Director, HR
and Communications Director, Company Secretary as well
as representatives from News, Marketing and Finance. The
regulatory landscape is a regular standing agenda item, with
the licence renewal process currently discussed in detail at each
meeting. Compliance reports are received by the Management
Board at least twice a year, and the annual plan is approved
by both the Data Security Group and the Management Board.
The STV Board is provided with regular Legal and Regulatory
updates as part of the CEO’s report and includes updates on the
licence renewal process. During the year, representatives from
the Board and Management team participated in events in
Westminster to ensure that matters surrounding the Media Bill
and licence renewal were explained to decision-makers and
influencers. This included the importance of regionalisation in
discussions around prominence and fair value in the Media Bill.
OverviewStrategic ReportGovernanceFinancial StatementsAdditional Info 38 STV Annual Report and Accounts 2022
Risk management
Market volatility and impact
on advertising spend
Risk category: Returns and profitability
Risk trend: Increasing
Link to strategy: Maximise Broadcast/Drive Digital
Potential impact
STV’s sales, expenses and operating results could vary from
period to period as a result of a variety of factors, some of
which are outside STV’s control. These factors include general
economic conditions; conditions specific to general advertising
markets including the commercial television market; trends in
sales, capital expenditure and other costs; and the introduction
of new services and products by STV or its competitors. In
response to an ever-changing environment, STV may elect
from time to time to make certain pricing, service or marketing
decisions that could have a material adverse effect on sales,
results of operations and/or financial conditions.
The UK economy has been significantly impacted by
macroeconomic factors in 2022 which has contributed to
uncertainty and caution in the advertising market. The ongoing
energy crisis and resulting inflationary pressures together
with the volatility experienced in the advertising market has
resulted in the risk trend being updated to increasing.
How we manage it
STV’s national linear advertising is sold by ITV and the contract
requires ITV, as agent, to maximise revenue through ‘best
endeavours’. ITV provide a weekly performance report, and
regular meetings are held between the senior commercial
management from both companies to understand current
forecasts, trends, and other related matters.
In December 2022, STV broadened its contractual
arrangements with ITV that included outsourcing national VOD
sales for STV Player to ITV with STV retaining responsibility for
selling regional VOD and digital sponsorship. STV’s regional
Scottish advertising (for both linear and VOD) is sold by a
separate, dedicated team who pursue a range of initiatives
designed to ensure the effectiveness of our sell, driven by the
STV Growth Fund through which we provide matched-funding
and other support to make TV advertising affordable and
enable businesses to grow their brand awareness. The strength
of the relationships that the commercial teams have with
their clients is crucial in selling advertising services, and in
maintaining those sales levels during periods of uncertainty.
Our clients are already aware of the benefits of advertising
on STV and we have an array of marketing and advertising
opportunities across STV and STV Player to help existing and
new businesses reach Scottish consumers and grow their
business, including the STV Growth Fund and STV Self Service.
Governance and oversight
Weekly advertising revenue reports, by category, are circulated
to the Management Board, highlighting movements in forecast,
key market/customer changes and other relevant information.
There is a full discussion and challenge at each Broadcast board
meeting when STV’s Commercial Director provides a report on
national and regional sales and the general outlook for the
market. VOD revenue sales, and related impressions delivered,
are reported to the Digital board. Both the CEO and the CFO
report on the advertising market in their respective reports at
each Board meeting with the latter providing rolling forecast
information on each of national, regional and VOD revenues.
Detailed analysis and narrative was shared with the Board at
its November and December meetings as the Group’s 3 year
strategic plan and 2023 Budget were discussed and approved.
Reliance on ITV
Risk category: Returns and profitability
Risk trend: No change
Link to strategy: Maximise Broadcast/Drive Digital
Potential impact
The majority of STV’s Channel 3 programming content is
provided by the ITV Network. Therefore, its ability to attract
and retain audiences is dependent on the quality, variety and
diversity of programming available, which, in turn, impacts
the ability of STV to attract regional advertisers. In addition,
the performance of ITV as STV’s national linear and VOD
advertising sales agent is a significant factor that affects the
financial performance of the Group. Appointing ITV as sales
agent for VOD advertising aligns STV with a significant market
player with considerable scale and reach, in a market that is
increasingly mature and seeing new entrants in the form of
the global streamers as they develop their AVOD propositions.
The risk trend has been assessed to be the same year on year
as reliance on ITV in this fast-evolving market is considered to
lower STV’s overall returns and profitability risk associated
with VOD advertising, particularly at this point in ITV’s own
growth trajectory for its digital business.
How we manage it
This relationship is managed closely, with regular updates
on programme and schedule developments being provided
through STV’s Head of Consumer Insights with STV’s
Commercial Director having responsibility for the sales
relationship with ITV. There are increasing touchpoints across
both digital businesses as well with the expansion of the
arrangements between the two companies in relation to
digital content.
Contracts are in place for all network functions performed
by ITV with agreed consultation processes for any changes
to arrangements. Binding Heads of Terms were agreed in
December 2022 in relation to the new arrangements in place
from 1 January 2023.
Regular dialogue includes formal quarterly ITV Council
meetings with minutes provided to Ofcom. Regarding ITV
acting as the Group’s national sales agent, there are regular
meetings between the Commercial Directors of both
businesses to discuss latest forecasts, booking trends and
similar factors. In addition, there is contractual profit protection
for STV in relation to national linear sales whereby STV’s
contribution to the national programme budget is pegged to
national advertising revenues, with the cost only increasing
in the same proportion as any increase in revenues.
Governance and oversight
The Managing Director of Broadcast and the CEO attend the
ITV/ STV Council, along with other members of the senior
management team. At these meetings programme strategy
and performance is discussed as well as relevant regulatory
issues, marketing plans and operational issues relating to
the relationship between the two. The CEO provides a
comprehensive report to the Board at each meeting which
covers all aspects of STV’s relationship with ITV, including
meetings held and issues discussed.
STV Annual Report and Accounts 2022 39
Changing viewing habits
Cyber attack or data breach incident
Risk category: Returns and profitability
Risk trend: Increasing
Link to strategy: Maximise Broadcast/Drive Digital
Potential impact
Previously, television was broadcast to a mass audience
through a small number of channels and followed a set
schedule. However, advances in technology and improved
connectivity have resulted in viewers being able to access
content through VOD services. Recent evidence suggests
that it isn’t the volume of videos available to watch, rather
it’s a platform having a ‘big show’ that attracts viewers (and
therefore will attract advertisers). There is a risk to STV of
reducing viewing and advertising revenue as a result if it
doesn’t have the right content to service its audience, and
that doesn’t continue to adapt to reflect changing patterns.
This risk has been assessed as increasing in response to the
pace of digital transformation and demand for content.
Risk category: Information security and cyber
Risk trend: Increasing
Link to strategy: Maximise Broadcast/Drive Digital/
Build world class Studios
Potential impact
Cyber risk commonly refers to any risk of financial loss,
disruption to operations or damage to a company’s
reputation resulting from the failure of its information
technology systems. STV is dependent on technology for the
smooth running of its business and a cyber-security incident
could lead to a loss of commercially sensitive data, a loss of
data integrity within systems, a loss of financial assets
through fraud, or a disruption that prevents efficient running
of our operations. Cyber attacks are becoming increasingly
sophisticated, with several significant breaches reported by
reputable large businesses in the UK over recent months.
Accordingly, this risk has been assessed as increasing.
How we manage it
How we manage it
STV delivers strong audience performance both in linear
and digital, and the shift to digital viewing is a focus for both
the Broadcast and Digital teams. The strategy of the digital
business is to provide viewers with the opportunity to decide
what they want to watch, and where and when they want
to watch it. STV Player is building strong connections with its
growing audience by adding new high quality content – both
network and acquired – and considerable investment was
made during 2022. This will be enhanced going forward with
the recent deal with ITV through which it secured exclusive,
original content in extended preview windows for STV Player in
Scotland. The new content from various third party providers is
intended to give the Player a strong combination of ‘big shows’
with ‘big names’ that will attract new and existing users,
that is supplemented by a strong library of other content.
Our rewards programme, STV Player VIP, enables us to build
even stronger connections with our audience.
Governance and oversight
Consumer insights are discussed at each Board meeting with
detailed information on the schedule performance provided
including percentage viewing share, the year on year change
in this and the year on year changes in audience volumes.
Twice each year, the senior leadership team has presentations
from a third party on viewing trends, and at least annually
representatives from the same third party provide an update
to the Board – this Board presentation took place in June in
2022. At the Broadcast and Digital divisional board meetings
audience and viewing figures for both linear television and
VOD services are discussed. This matter is also discussed
with ITV at the ITV/STV Council meetings.
We have in place a data and cyber security risk management
framework, including disaster recovery and business continuity
plans, with relevant aspects led by the Data Security Group,
Cyber Security Group and the Group’s Compliance Manager.
Our framework combines a number of technical measures,
designed to both prevent and detect incidents, as well as
a range of policies for staff to follow, and an on-going
programme of training to ensure awareness of Group practices
and emerging risks. The policies in place cover information
security, data retention and data incident reporting.
The IT infrastructure is protected by firewalls and software
restricting use to authorised persons only. Regular internal
and external network penetration tests are performed by
a third-party to ensure the level of protection is maintained
and that any necessary remediation work is highlighted and
can be actioned. We also have an on-going programme of
hardware and software upgrades to ensure current security
protections are in place, and the business is able to operate
efficiently. Several cyber related risk management activities
were carried out in 2022, including a detailed internal audit
review designed to test the reliance of our data and cyber
security risk management framework. Fault Injection Testing/
Chaos Engineering is carried out on a periodic, unannounced
basis by the Digital team to ensure that recovery protocols
and controls operate effectively and as intended.
Governance and oversight
Monthly meetings and on-going schedules of activity of both
the Data Security Group and the Cyber Security Group, with
regular reporting to the Audit & Risk Committee. Review and
challenge of capital and other major projects by divisional
boards, supplemented by reporting on disaster recovery tests
and chaos engineering in Digital. Regular reports to the Board
on major projects, internal controls, and risk management,
supplemented by reports from the Chair of the Audit & Risk
Committee on work undertaken in relation to the reliance of
STV’s data and cyber security risk management framework.
OverviewStrategic ReportGovernanceFinancial StatementsAdditional Info 40 STV Annual Report and Accounts 2022
Risk management
Defined benefit pensions scheme
shortfalls resulting in increasing
employer contributions
Risk category: Liquidity
Risk trend: No change
Link to strategy: Maximise Broadcast/Drive Digital/
Build world class Studios
Potential impact
The STV defined benefit pension schemes’ investment
strategy is aimed at reducing any market movement impacts.
However, it is possible that a macroeconomic change could
impact the value of scheme investments and liabilities and
increase the deficit, requiring the Group to increase its
contributions. In the current environment, a significant
increase in gilt yields is having a positive effect on DB pension
scheme deficits in general. However, the schemes remain
subject to risks associated with future regulatory change.
How we manage it
STV is invited to attend all Investment Sub-Committee
meetings, and also certain agenda items of the Actuarial/
Valuation Sub-Committee and the full Trustee Board. This
meeting participation is supplemented by certain papers being
shared with STV, specifically on performance of the scheme’s
investments and hedging reports, which enable an on-going
and active dialogue in relation to the investment portfolio.
Following agreement on the 2020 triennial valuation, a
Memorandum of Understanding between STV and the
Trustees was put in place, which sets out each other’s
commitment to working together towards agreement
(and delivery) of a long term journey plan.
Governance and oversight
Managing STV’s defined benefit pension schemes has been
identified as a key risk for several years and is discussed
regularly by the Board. During the course of 2022, the CFO
presented a number of updates to the Board in relation
to pensions, covering topics that included investment
performance and the impact on hedging and funding levels
of the increases in gilt yields in Q3 2022, and the Funding Code
proposals. This work was supplemented by a detailed paper,
presented to the Board in October by the Company’s pension
advisers, LCP, which covered an overview of the Group’s
schemes, changes in the regulatory landscape, and their
potential impact on STV.
Recruitment and retention of people
Risk category: People and culture
Risk trend: Increasing
Link to strategy: Maximise Broadcast/Drive Digital/
Build world class Studios
Potential impact
The market for talent is highly competitive, particularly in
the Studios and Digital businesses where demand for the
best creative and development people is much higher than
the current levels of supply. Recruiting and retaining the best
individuals with these skills is vital to STV successfully growing
these key businesses. The cost of hiring staff is also increasing
and there is added pressure on securing diversity through
the recruitment process to attain STV’s diversity targets.
Furthermore, in the current inflationary climate, salary
inflation is at higher levels and there is therefore heightened
risk to retention if the Company’s salary proposals are not
deemed appropriate against the increased cost of living.
How we manage it
Having a clear strategic direction provides an attractive
backdrop to working at STV and the HR team ensures that
all employees receive at least the market rate in terms of
compensation. Salaries are regularly reviewed and there are a
wide range of benefits available to employees. Hybrid working
arrangements mean there is no longer a requirement for
employees to be permanently office based so the pool of
available candidates for roles, particularly in the Digital
division, has increased.
In the current climate, the Group has sought to focus on
employee wellbeing in the widest sense and has broadened
the benefits available to its people, as well as making a
number of additional payments in order to support them
with the increased cost of living.
Governance and oversight
Succession planning and talent management are discussed
regularly at both the Board and Nomination Committee
meetings as well as at the Studios and Digital divisional board
meetings. The salary negotiation process is discussed in detail
with Board, with the Board paying particular attention to the
suite of benefits available to teams in the current climate.
STV Annual Report and Accounts 2022 41
The Board does not consider any of these factors to individually
threaten the viability of the business and therefore the viability
assessment focussed on a range of potential scenarios in
which there was a compounding effect from all potential risks
crystallising simultaneously. These scenarios included a severe
but plausible downside scenario, and more extreme scenarios
in which the Group would breach borrowing and/or covenant
limits. The Board reflected on its relatively recent experiences
in 2020 when considering severe but plausible outcomes, given
advertising revenue declines during that time (driven by the
Covid-19 pandemic and resultant lockdowns) were the most
significant seen by the business in its history.
The severe downside scenario modelled assumed a
combination of (i) significant reductions in linear advertising
revenues over a 12 month period with a relatively slow return to
more normal levels; (ii) lower levels of VOD revenue and Digital
profitability driven by wider market conditions and higher costs
of content and marketing than planned; and (iii) a reduction in
anticipated commissions within Studios, particularly in the
drama genre and from global streamers. Even in these extreme
circumstances, the Group would remain within its banking
facility (without exercising the £20m accordion facility) and
comply with all financial covenants.
In evaluating these models, the Directors took into account a
number of the available mitigating actions that the business
would reasonably take to manage the impact, specifically in
relation to cost reduction, management of working capital,
capital investment and returns to shareholders.
Having conducted the above exercise and taken into account
the business model, strategic aims, risk appetite, and principal
risks and uncertainties, along with the Group’s current financial
position, the Directors are satisfied that the Group will be able
to continue in operation and meet its liabilities as they fall due
over the three year period under review.
Viability statement
In accordance with the UK Corporate Governance
Code 2016, the Directors are required to perform
an assessment of the Group’s viability over a
period longer than the twelve months required
for the going concern statement.
The period taken into consideration for this year’s viability
assessment is three years, consistent with that applied
previously, as the Directors continue to deem this the most
appropriate time frame for assessing the Group’s longer-term
viability. This decision reflects the following factors:
• Visibility over the broadcast advertising business is relatively
short term; advertising remains cyclical and closely linked
to UK economic growth;
• The programme development lifecycle tends to be more
medium term, however over time there is less visibility due
to changes in viewer demand;
• The speed of innovation in the digital landscape continues
to drive changing viewer and consumer habits, with limited
visibility beyond the short-term;
• One of the Group’s key funding obligations is payment of
deficit recovery contributions to its defined benefit pension
schemes, which are dependent on funding valuations
undertaken every three years; and
• Capital expenditure requirements do not require
consideration over a period beyond three years.
This year’s assessment covers the period from 1 January 2023
to 31 December 2025.
The viability assessment evaluates the potential financial
impact of the principal risks and uncertainties that are faced by
the Group, to assess its ability to withstand them. The analysis
takes as its starting point the Group’s 2023-2025 Strategic Plan
which was prepared over Q4 2022 and approved by the Board
in December 2022. These plans are the result of detailed
consideration of all areas of the business including the business
model, opportunities, potential risks and uncertainties faced
over that timeframe, and include profit and loss and cash flow
forecasts. They reflect the current economic environment
and management’s best estimate of the likely duration and
impact of the cost of living crisis and macroeconomic
uncertainty, including the inflationary environment and
current low levels of consumer confidence, as well as
mitigating actions that are available.
In assessing the viability of the business, the Board considered
several factors that may have a material impact over the
period covered by its assessment, principally falling under the
risks of ‘Market volatility and advertising spend’ and ‘Changing
viewing habits’. Consideration was given to the extent to which
the advertising market in particular would be likely to
underperform against the assumptions in the baseline
Strategic Plan. The main factors identified were:
a) The performance of the national and regional advertising
markets is significantly adverse to forecast;
b) The projected growth in digital advertising is significantly
adverse to forecast, or the forecast level of growth requires
incremental investment over and above that assumed in
the Strategic Plan; and
c) The projected momentum in programme commissions
and therefore revenue and gross margin in STV Studios
is significantly adverse to forecasts, and is insufficient
to leverage fully the fixed cost base.
OverviewStrategic ReportGovernanceFinancial StatementsAdditional Info 42 STV Annual Report and Accounts 2022
Taskforce on Climate-related Financial Disclosure (TCFD) report
Compliance Statement
As required by Listing Rule 9.8.6(8)R, this report sets out how we
have responded to the four recommendations, and 11 supporting
recommended disclosures, of the TCFD Framework and narrative
disclosure has been provided on all aspects. This report constitutes
our full disclosure in this area with no separate reporting provided
elsewhere, either on our corporate website or in other documents.
We have considered compliance with each of the four pillars
in turn:
• Governance – this report provides disclosures consistent
with both recommended disclosures under this pillar.
• Strategy – our reporting is consistent with recommended
disclosures a) and b). Our robust assessment of climate-related
risks and opportunities has concluded they are immaterial
and so we have not performed scenario analysis. We have
included details of the process undertaken to reach this
conclusion and therefore consider this report is also
consistent with recommended disclosure c).
• Risk Management – this report provides disclosures consistent
with each recommended disclosure under this pillar.
• Metrics and Targets – we have again applied our assessment
of materiality to the recommended disclosures under this
pillar. We have disclosed Scope 1 and Scope 2 greenhouse
(GHG) emissions, and we have included certain Scope 3 GHG
emissions (where data can be reliably sourced). Furthermore,
we have set targets for reductions in Scope 1 and Scope 2
GHG emissions and have shared these in the report. These
emission disclosures are included in our Streamlined Energy
and Carbon Reporting (SECR) report, which forms part of this
TCFD report. We consider that, against the backdrop of
climate-related risks and opportunities being assessed as
immaterial, we have presented disclosures consistent with
the framework in this pillar.
The balance of this report provides the detailed narrative
in support of our assertion of compliance with each of the
recommended disclosures of the framework.
Introduction
Through STV Zero, our sustainability strategy, we are
committed to mitigating STV’s environmental impact and
improving the long-term sustainability of all aspects of our
business in response to the climate crisis. The transition to
becoming a net zero carbon business by 2030 will require some
changes in the way we operate, which will be achieved through
delivery of the framework of targets set out in our strategy,
building incrementally each year from now until then. There
are also potential opportunities for the business to support
advertisers promoting sustainable goods and services and to
connect with our audiences and support them to make more
sustainable choices.
Following on from the initial work undertaken during 2021, we
have continually reassessed the potential risks and opportunities
that the climate crisis presents to the business, and used this
to refine our assessment of actual and potential financial
impacts arising from climate change.
During the year, the Group’s internal auditors (KPMG)
undertook an audit of the governance and risk management
processes in place in relation to climate-related matters.
No high priority findings were identified; a number of
recommendations were suggested to formalise and enhance
existing practices and these are being implemented by the
management team. Follow up reporting will be shared with
the Audit & Risk Committee during 2023.
In providing its annual approval of the sustainability governance
structure, the Board has again considered its own expertise and
experience in this area. This self-evaluation was supported by
the externally facilitated Board effectiveness review (see page
65). Directors are comfortable that there is sufficient experience
among existing members for the short to medium term.
Notwithstanding this, further consideration will be given
to this through the normal succession planning undertaken
for Non-Executive Directors, against an evolving landscape.
STV: Sustainability governance structure
PLC Board
Responsible for:
• Ensuring the effective delivery of STV Zero targets
• Reviewing key climate-related risks and opportunities and
overseeing mitigation strategies as part of the regular
review of principal and emerging risks
• Considering sustainability as part of stakeholder engagement
• (Remuneration Committee) Setting sustainability-related
targets in executive incentive arrangements
Audit & Risk Committee
Responsible for:
• Supporting the Board in its responsibilities for sustainability,
including:
– Overseeing compliance with, and progress on,
sustainability reporting
– Overseeing the Company’s environmental data and
its accuracy and completeness, the Company’s annual
sustainability targets, and the governance and planned
roadmap to enable the targets to be achieved
– Ensuring sufficient, appropriate assurance is obtained
in relation to sustainability reporting
Management Board
Responsible for:
• Identifying all climate-related risks and opportunities
and developing appropriate mitigation strategies
• Reviewing and monitoring climate-related risks on a
bi-annual basis as part of routine risk reviews and establishing
effective mitigation and controls to manage them
• Ensuring appropriate action is being taken to achieve the
STV Zero strategy, through review of quarterly reporting
on climate-related issues, including metrics and targets
Divisional Boards
Responsible for:
• Monitoring divisional progress against divisional emissions
This assessment forms the basis of disclosures against the TCFD
framework and, as we progress towards our goal of net zero by
2030, we will continue to refine our analysis and develop our
disclosures in future.
reduction plans
• Studios and Broadcast – tracking Project albert carbon
action plans to ensure achievement of accreditation for
all STV-produced programming
Governance
The Company’s governance structure in relation to climate-
related matters is set out below. This structure identifies the
key responsibilities at all levels in the organisation and clarifies
accountability for governance. This structure has been reviewed
by the Board during the year and is considered to be appropriate
and operating effectively.
Sustainability Group
Responsible for:
• Promoting and championing sustainable behaviours
across the Group
STV Annual Report and Accounts 2022 43
The Board has received three reports from management over
the course of 2022 covering a wide range of matters in relation
to sustainability, including (i) progress against operational
targets set for 2022 that underpin the ultimate goal of being
a net zero carbon business by 2030; (ii) the Group’s governance
structure; and (iii) horizon scanning for emerging risks and
reassessment of previously identified climate-related risks
and opportunities. As part of the Board’s wider review of the
Group’s risk management framework and related processes,
a revised Group Risk Management Policy was approved which
was supplemented by a Risk Impact Heat Map. The heat map is
designed to enable consistent measurement of the impact and
likelihood of potential identified risks across a series of financial
and non-financial criteria. One such criteria is ‘Health & Safety
and Corporate Sustainability’, which has been added during
the year to reflect the importance of climate-related impacts
in wider decision-making and risk assessment.
The revised risk management policy and related documentation
has been circulated across the business and training has been
provided to the senior leaders in each division to ensure
consistency of messaging and approach.
More broadly across the organisation, managers have
sustainability targets incorporated into their personal objectives
for bonus purposes. The Remuneration Committee is responsible
for approving the objectives of the Executive Directors, on which
an element of variable pay is dependent. On a quarterly basis,
and as part of routine risk reviews, managers are responsible for
assessing and managing climate-related risks and opportunities
within their business area. Additionally, managers are
responsible for ensuring appropriate action is being taken to
deliver the STV Zero strategy as it relates to their business and
areas within their control. Reports on sustainability related
issues, including progress against targets, have been delivered
and discussed at divisional board meetings, and at meetings
of the Management Board.
The STV Sustainability Group comprises representatives from
every business area who are responsible for promoting and
championing sustainable behaviours across the Company
and participating in the development and implementation of
sustainability initiatives. Its members have played an important
role as ambassadors for STV Zero as this has been introduced
to the business.
Strategy
We have revisited and refreshed our assessment of climate-
related risks and opportunities during the year with the Board,
the Management Board and at each of the Divisional Boards.
Consistent with our previous conclusions, we determined that
none of the risks identified gave rise to any material financial
or non-financial exposures to the Group. Furthermore, the
process concluded that none of the risks represent a significant
threat to the Company’s strategy and growth plan, its cash
generation, long-term viability, or ability to operate. In this
context, we defined ‘materiality’ as an impact on the business
that limited our ability to carry out our operations, and/or
required a change to our business model, and/or had a
significant impact on our liquidity thereby limiting our
ability to invest or meet our obligations.
Although the TCFD Framework only requires disclosure of
actual and potential impacts of climate-related risks and
opportunities on our business, strategy and financial planning
where those impacts are material, we have provided some
detail behind the process we undertook, and the main risks
and opportunities identified. As our risk impact assessment
has not identified any material impacts, we have not
undertaken modelling of climate-related scenarios to assess
the resilience of the Group’s strategy. However, we made an
SME submission to Science based Targets Initiative (SBTi)
during the year and received confirmation from them that
our sustainability strategy was consistent with the goals
of the Paris Agreement.
In terms of the risk assessment, transition and physical risks
were considered – transition risks being those that arise from
transition to a low carbon economy, and physical risks being
those that arise from the physical impacts of a changing
climate. In carrying out this assessment, we considered three
time periods: the short term to the end of the current financial
year, 2023; the medium terms, through 2024 and 2025; and
the long terms, from 2026 to 2030. These time periods were
considered relevant in the context of the Company’s business
planning cycle; investment plan; and its strategy to transition
to a net zero carbon business by 2030.
The most significant – but not material – potential climate-
related risks identified were (with the relevant area of the
business and anticipated time period indicated in brackets):
• Failure to embed sustainability in the culture of the business
(Company-wide and short term).
• Failure to achieve Project albert accreditation which could
impact the ability of STV Studios to secure new commissions
(STV Studios and medium term).
• Failure to deliver our sustainability targets which could
impact the attractiveness of the Company’s investment
proposition (Company-wide and medium term).
There were no significant risks identified in the long-term.
Opportunities were identified in the short and medium term
to attract advertisers wishing to promote the sustainability of
their products and services, as evidenced through the positive
experience of attracting new advertising clients since the
launch of the STV Green Fund. Using STV’s position as a trusted
Public Service Broadcaster to promote sustainable lifestyles and
behaviours presents an opportunity for audience engagement.
Alongside our assessment of climate-related risks and
opportunities, we have undertaken an exercise to understand
the related actual and potential financial impacts on our
business. This is continually reassessed to ensure it reflects
emerging risks and opportunities, and the wider markets in
which we operate. Our conclusion remains that there is no
significant financial impact in terms of operating costs, capital
investment or balance sheet valuations arising from the risks
and actions required to achieve the headline sustainability
target of becoming net zero by 2030. Details behind this
assessment are set out below:
• Maintaining carbon neutrality was driven by several actions,
the most individually significant of which were switching
(in 2021) to renewable electricity in our sites where we
have control of the electricity supply contracts (97% of
total usage) and reducing levels of business travel (in 2022
we reduced CO2 emissions from business travel by almost
70% using 2019 as a baseline). The cost of carbon offset
credits in 2022 was minimal.
• We have reviewed our property, plant and equipment
(PPE) to identify any items that are impaired as a result of
changes to the way we work to reflect transition to a more
environmentally sustainable operation. Most of our PPE is
broadcast technical infrastructure, other items of IT
infrastructure in support of STV Player and core support
functions (email, networks, etc.), and multi-media kits used
by our journalists and news operation. There have been no
impairment charges identified through this review.
• In March 2021, we set out a £30m investment programme
over 3 years to accelerate growth in our Digital and Studios
businesses. In Digital, this investment focuses on the
licencing of third party content for STV Player, and marketing
thereof, and further development of the STV Player user
OverviewStrategic ReportGovernanceFinancial StatementsAdditional Info 44 STV Annual Report and Accounts 2022
Taskforce on Climate-related Financial Disclosure (TCFD) report
interface. In Studios, it is placing more creative bets either
through enhancing our in-house development teams or
continuing to invest in external creative labels. The nature
of this investment has not changed as a result of our work
to achieve our STV Zero targets and priorities, nor has there
been any impact on the capital available to invest. We do
not anticipate any change to the priority we attach to each
area of investment.
• It is possible that certain costs of operation may increase as
we transition to lower carbon operations, for example heat,
light and power, and insurance. The current high energy
prices are UK-wide and not climate-related. We do not
expect any future climate-related impact to be material,
and there may be opportunity to offset any cost impacts
through additional advertising revenue from brands seeking
to promote the sustainability of their products and services.
• We continue to engage with the trustees of the Group’s
defined benefit pension schemes to understand their
approach to the climate crisis from an investment perspective.
Based on discussions to date we have not identified any
significant risks or incremental costs to the Group but continue
engagement with them as they develop their thinking and
look to implement potential actions in this area.
• Lenders and equity investors are placing increasing
significance and importance on our sustainability
credentials, and we actively engage with them on STV Zero
and our targets. We anticipate that, at some point in the
future, lenders may seek to embed climate-related clauses
in our facility agreement and thereby directly link the cost of
funds with successful delivery of our sustainability targets.
Our current debt facility, with a 3-year term, was agreed
in March 2021 and has no such linkage. We have recently
exercised the second of our one-year extension options with
no climate-related conditions being applied – the facility
now extends to March 2026.
Risk management
Following the Board’s approval of the revised Group Risk
Management Policy and Risk Appetite Statement, the
identification, assessment and management of climate-
related risks has been further embedded into the Company’s
risk management and internal control processes and now
forms part of the routine risk reviews and Board reporting
in place across the Group. It has been enhanced by the
development of a Risk Impact Heat Map which includes a
specific criteria for sustainability risks to ensure they are
considered and measured in a way consistent with other
identified risks across the Group.
Detailed reporting on the Group’s risk management framework
has been included in the Risk Management report on pages
34 to 40.
The Management Board is actively engaged in climate-related
risk management activities, with regular discussions on the
status of achievement of targets (including scope 3 GHG
reduction targets for business travel, and achieving Project
albert certification for all programming produced by STV Studios
and the Broadcast division) and identification of follow-up
actions required. Divisional action plans were developed to
drive accountability for making the changes necessary to
achieve our short-term and long-term targets, and to ensure
we are managing the potential impact of climate-related risks
and opportunities in a timely and effective manner.
Each divisional action plan has specific targets that relate
to the activities of the division. Designed to increase focus
on adopting new ways of working to reduce the Company’s
carbon impact, targets include training and sustainability
awareness; measurement of business travel; and incorporating
a carbon calculation into production processes.
In 2022, the Group commissioned a flood risk assessment
at the main offices in Pacific Quay, Glasgow, which is on the
banks of the River Clyde, as part of the renewal process for
its Group insurance programme. Flood modelling undertaken
determined that a 1-in-200 year event of flood waters reaching
1m would have limited impact on the building due to the level
of the interiors being further above the external ground level.
Flood levels of 1.5m would need to be reached for the building’s
defences to be breached, which is the equivalent of a 1-in-1000
year event.
Metrics and targets
The fourth pillar of the TCFD Framework requires disclosure of
the metrics and targets used to assess and manage relevant
climate-related risks and opportunities, where they are material,
except for Scope 1 and Scope 2 GHG emissions which should
be reported regardless of materiality. Although the disclosure
of Scope 3 GHG emissions is subject to materiality, there is
general encouragement to disclose them where relevant.
The Group’s Streamlined Energy and Carbon Reporting (SECR)
is included below and on page 45. This shows the Group’s Scope
1 and Scope 2 GHG emissions for the current and prior year.
In addition, this year we have included disclosure of Scope 3
GHG emissions for three of the 15 categories and we have set
carbon emission reduction targets for Scope 1 and Scope 2
emissions for the period to 2025. All reporting in this area is
included in the SECR statement.
The Group achieved carbon neutrality for the first time in 2021
and has achieved this again in 2022.
Our energy usage target to obtain 100% of electrical energy
from renewable sources directly procured by the Company by
2022 was achieved and confirmed in last year’s TCFD report. Our
current contract for gas concludes in Q1 2024. We had intended
to transition to renewable gas before this date, but other areas
have since been identified where our carbon emissions can be
more meaningfully reduced, and from a financial perspective
we concluded that it did not make sense to exit fixed rate
contracts early in the current inflationary environment.
The metrics and targets that we use to assess our progress
towards achieving carbon net zero are targets aimed at
reducing our carbon impact in the five key areas identified in
STV Zero: energy consumption; waste reduction; programme
making; promoting sustainability using STV’s reach; and
achieving a sustainable supply chain. In turn, these targets
will only be achieved if we successfully embed a sustainability
culture into the business.
We have included an update on the STV Zero targets that we
set ourselves for 2022 in our Social Impact statement on pages
47 to 54, along with an overview of the new targets we are
working towards in 2023.
Streamlined Energy and Carbon Reporting (SECR) –
based on data for year ended 31 December 2022
In line with the GHG Protocol Corporate Standard, the Company’s
SECR is based on the disclosure of emissions from operations
over which it has direct financial and operational control.
As the Company is registered in the UK with no operations
overseas, all emissions derive from UK-based activities. These
Scope 1 and Scope 2 emissions are set out in the table below.
A dual reporting approach to the emissions associated with the
Company’s grid electricity consumption (Scope 2) has been used
to disclose both a location-based and market-based figure.
During 2022, we have continued to monitor Scope 3 emissions
and have performed an initial assessment of the relevance of
each of the 15 Scope 3 emissions categories to the business.
STV Annual Report and Accounts 2022 45
This concluded that there were 6 categories not applicable to
STV, namely downstream transportation and distribution (cat
9), processing of sold products (cat 10), use of sold products (cat
11), end of life treatment of sold products (cat 12), franchises
(cat 14) and investments (cat 15). We also undertook detailed
work on the collection and analysis of data in relation to three
categories of Scope 3 emissions, which we have reported for
the first time in this annual report. These categories are: fuel
and energy related activities (cat 3); waste generated in
operations (cat 5); and business travel (cat 6). We will continue
to develop our data collection and analysis processes over 2023
as they relate to Scope 3 emissions and intend to extend our
reporting to include categories 4 and 7 from 2023 (upstream
transportation and distribution, and employee commuting).
During 2022, we continued to focus on our programming being
certified by the industry-wide albert scheme. For the first time,
all our STV News output produced by STV Central Limited
and STV North Limited were certified. In addition, 79% of
UK-produced programmes delivered by STV Studios were
albert certified in 2022.
Scope 1 emissions reduced by 16% during the year, and
combined Scope 1 and Scope 2 emissions also decreased
by 16%, on a market-based approach, as a result of the
delivery of a range of efficiency measures and sustainability
improvements. These included the completion of installation
of LED lighting in the Company’s Head Office in Glasgow and
the final phase of the roll-out of upgraded technology for all
employees, which included improved meeting technology to
support a hybrid working model. Light sensors and timers were
reset at our Head Office to better match working hours across
the office and thereby reduce energy consumption, and we
implemented new processes in relation to our boilers to better
align activity to occupation of the building.
The table below shows our Scope 1, Scope 2 and certain
categories of Scope 3 emissions for 2022 and 2021.
Scope
Description
1
2
Emissions from gas, refrigerants and owned vehicles
Location based
Electricity emissions using geographical location
Market based
Electricity emissions using purchased electricity factor
1 & 2
Location based
Electricity emissions using geographical location
Market based
Electricity emissions using purchased electricity factor
Total revenue
Total Scope 1 & 2 intensity ratio (location based)
Total Scope 1 & 2 intensity ratio (market based)
3
Fuel and energy related activities
Waste generated in operations
Business travel
Total scope 1, 2 and 3 (market based)
Methodology
The methodology used to calculate 2022 emissions is the
GHG Protocol Corporate Standard. In addition, the 2019 HM
Government Environmental Reporting Guidelines: Including
SECR guidance and the 2021 UK Government’s Conversion
Factors for Company Reporting have been used.
For Scope 2 emissions, the only estimated emissions data is
for electrical energy consumed in the Group’s office premises in
Inverness and London (actual data has been used for the offices
in Dundee for the first time in 2022). The estimated consumption
is based on the square footage of these locations which is used
for the same purpose as our other office premises. This amounts
to 1.25% of our total Scope 1 and Scope 2 emissions.
For Scope 3 emissions, waste data has been collected from our
Head Office in Glasgow and our storage unit at a separate site,
also in Glasgow. This represents waste generated by 83% of
staff in the Group.
Unit
tCO2e
kWh
tCO2e
kWh
tCO2e
kWh
tCO2e
kWh
tCO2e
kWh
£m
tCO2e per £m
tCO2e per £m
tCO2e
tCO2e
tCO2e
tCO2e
2022
345.83
2021
411.88
1,785,859
2,147,726
596.63
672.92
3,085,247
3,169,218
13.56
13.56
3,085,247
3,169,218
942.45
1,084.80
4,871,107
5,316,945
359.39
425.44
4,871,107
5,316,945
137.8
6.84
2.61
260.61
1.57
110.89
732.46
144.5
7.51
2.94
329.56
1.41
115.80
872.21
Emissions targets
As part of our continued drive to become a net zero carbon
business by 2030, this year we have set medium term targets,
to 2025, for carbon emission reductions across Scope 1 and
Scope 2. We have used a baseline of emissions in 2019 to set
targets against and, in 2022 achieved a reduction across both
Scope 1 and Scope 2 taken together of 70% (equivalent to
more than 800 tCO2e). Most of this reduction has been driven
by the business transitioning to renewable energy, which has
now been achieved at all offices where we control supply. Our
target to the end of 2025 is to reduce our emissions across
Scope 1 and Scope 2 by a further 24 tCO2e, taken together. This
would be the equivalent of a 72% reduction on 2019 levels.
The methodology underpinning these forecasts is consistent
with those described above in relation to reporting actual
emissions for 2022 and 2021.
OverviewStrategic ReportGovernanceFinancial StatementsAdditional Info 46 STV Annual Report and Accounts 2022
Non-financial information statement
The table below sets out where stakeholders can find information in our Strategic Report that relates to non-financial matters
detailed under section 414CB of the Companies Act 2006.
Reporting requirement
Some of our relevant policies
which govern our approach
Environmental matters
• STV Zero
• Sustainability Strategy
Where to read more in this Report about
our impact, including the principal risks
relating to these matters
• Social impact
• TCFD report
• Risk management
• Stakeholder engagement – S.172
Employees
• Equity, Diversity and Inclusion Policy
• Social impact
• Risk management
• Governance
• Flexible Working Policy
• Business Ethics Policy
• Respect & Dignity at Work
• Health & Safety Policy
• Carers Policy
• Maternity Policy
• Menopause Policy
• Parental Leave & Policy
• Transitioning at Work Policy
• Adoption Policy
Human rights
• Modern Slavery Statement
• Operating reviews
• Data Protection Policy
• Supplier Payment Policy
• Information Security Policies
• Social Media Policy
• Stakeholder engagement – S.172
• Social impact
Social matters
• Diversity and Inclusion Strategy
• Stakeholder engagement – S.172
• Drivers Manual
• Social impact
• Governance
Anti-bribery and corruption
• Business Ethics Policy (includes Anti-bribery)
• Risk management
• Whistleblowing Policy
• Gifts and hospitality policy
• Share Dealing Code
• Governance
• Business model
• Social impact
• Risk management
Business model
Non-financial KPIs
Principal risks
Pages
47 to 54
42 to 45
34 to 40
12 to 13
47 to 54
34 to 40
55 to 90
14 to 29
12 to 13
47 to 54
12 to 13
47 to 54
55 to 90
34 to 40
55 to 90
10 to 11
47 to 54
34 to 40
STV Annual Report and Accounts 2022 47
Social impact
Introduction
As Scotland’s Public Service Broadcaster we occupy a privileged place
in the lives of our viewers and have an opportunity not just to entertain,
inform and engage but also to use our platform as a force for good
in society. Our social impact strategy spans engagement with our
commercial partners, community fundraising, sustainability, diversity
and inclusion, and mental health and wellbeing.
Over the past decade we have raised more than £30m for
children affected by poverty in Scotland through the STV
Children’s Appeal; STV Zero, our sustainability strategy, is our
roadmap to becoming a net zero carbon business by 2030,
and our diversity and inclusion strategy ensures we provide
equality of opportunity to every colleague and represent
everyone who is part of our audience on-screen.
We also remain an important partner to the business
community across Scotland, with our £30m STV Growth
Fund supporting an ever-increasing number of SMEs and,
importantly, championing those businesses promoting
sustainable and inclusive practices.
Our people
The creativity and talent of our people are the key determinant
of our commercial success and the greatest asset of the business.
Our aim is to provide an inclusive culture where everyone
has the opportunity to engage and have their voice heard,
be treated fairly and be supported to grow professionally
and deliver to their fullest potential.
Supporting colleagues to adapt to new ways of working to enable
greater flexibility in all aspects of their working lives has been a
priority in 2022. This support has ranged from changes to internal
communications and engagement activities, management
guidance to ensure teams are effectively supported in a hybrid
environment to embrace changes to technology and the physical
work environment and ensuring appropriate focus on roles that
cannot be undertaken on a hybrid basis.
Rewarding our people
Reward and remuneration are determined with reference to
the market and with the aim of attracting and retaining the
best talent. A company-wide grading structure, benchmarked
against a UK-wide peer group through our participation in
Willis Towers Watson’s annual media remuneration survey,
provides transparency and ensures reward and benefits are
market competitive.
The coinciding of a range of external factors have influenced
our approach to reward in 2022. These included a dynamic
labour market, rebounding from the low levels of activity
during the pandemic; high demand for skills in our growth
areas, particularly digital and television production; and the
macroeconomic situation during 2022, generating increases
to the cost of living and wage inflation.
We have responded through a range of measures designed to
support colleagues in managing the challenges of increases
to the cost of living. In early 2022, an across-the-board salary
increase of 3% was awarded to all colleagues. Additionally,
in recognition of the exceptional effort and contribution
from colleagues in delivery of 2021 performance, a one-off
all-employee share award with a face value of £1,000 was
awarded and this vested in full in March 2022. Colleagues also
received a one-off cash bonus of £500 at the close of 2021.
The creativity and talent
of our people are the key
determinant of STV’s
commercial success
and our greatest asset.
A priority for 2022 has
been to support colleagues
to adapt to new ways of
working to enable greater
flexibility in all aspects of
their working lives.
OverviewStrategic ReportGovernanceFinancial StatementsAdditional Info Looking to 2023, we will maintain the current focus on
supporting financial wellbeing and introduce new measures
designed to improve physical health and wellbeing. Making
Wellbeing from STV inclusive and accessible to all colleagues
is a key aim. Currently, freelance colleagues have access to
the Company’s employee assistance programme (EAP) and
occupational health resources and we will continue to extend
our wellbeing activities to introduce specific measures to
support the distinct characteristics of freelance working.
Engaging with our people
Our internal communications channels keep colleagues
updated and support them in establishing connections
across the business.
Our daily e-newsletter is read by over 80% of colleagues.
Daily News provides information and snapshots of activities
from across the business including programme releases;
performance stats; progress on STV Zero targets and priorities;
D&I updates; corporate developments; social events and
regular industry updates.
A weekly town hall update is hosted by the CEO and regularly
attended by over 50% of colleagues. Introduced during the
pandemic to bring colleagues together, the Minute Live has
continued as people have returned to office working, providing
an opportunity to hear from colleagues across the business.
Recent employee opinion surveys focussed on obtaining
feedback from colleagues to assess how they were adjusting to
new ways of working and measuring wellbeing. Have Your Say
is open to all colleagues, including freelancers, and in addition
to focusing on specific topics, is used to track engagement on
an ongoing basis. Surveys conducted in 2022 maintained high
response rates of over 80%.
Connections between the Board and colleagues across the
business are supported through Senior Independent Director’s
role as ‘Employee Director’. The Engagement Forum comprises
colleagues from every area and location of the Company and
meets with the Employee Director on a quarterly basis to hear
updates from the Board and to provide feedback for the Board
to assess. The Employee Director has also undertaken a
programme of site visits across all the Group’s offices.
48 STV Annual Report and Accounts 2022
Social impact
As the cost of living continued to increase a further cash
payment of £500 was made to approximately two-thirds of
colleagues in July 2022. These awards (cash payments and the
share award) delivered total incremental support in a range from
£1,500 (to all colleagues) to £2,000 (to two-thirds of colleagues).
In January 2023, an across-the-board salary increase of £2,000
was awarded to all colleagues, irrespective of the level of seniority
or role. This approach ensures that the increase to our salary
budget is focussed primarily on supporting our lowest paid
colleagues, with over two thirds receiving increases of at least 5%
with an increase of almost 10% to those on the lowest salaries.
This award was combined with a benchmarking review of the
salary and grading structure to ensure competitiveness with the
wider market. This process highlighted the significant demand
driven pressures influencing salary levels of roles in areas with
skills shortages, including digital and software development,
production roles in STV Studios and STV News, and editorial
roles in STV News.
Through this review, 20% of colleagues received an increase
to base salary in excess of £2,000. Overall, the average of these
additional salary increases, received by one-fifth of colleagues,
was 12.8%.
Involvement in the Company’s performance outcomes and
providing opportunities to share in success are aims of the
reward strategy. An all-colleague bonus plan, linked to
exceeding key financial targets, will be introduced for 2023.
A further Save As You Earn scheme was granted in 2022
promoting share ownership and a savings opportunity.
Currently 38% of colleagues participate in a SAYE scheme.
Wellbeing and support
Our wellbeing programme, Wellbeing from STV, has evolved
during 2022 with an increased focus on physical wellbeing
as colleagues returned to the workplace. The measures taken
to support financial wellbeing have also been a key part of our
approach to support our people in a holistic way.
CheckIn, our performance management process, has been
refreshed placing increased importance on taking time out
to talk about wellbeing and support, as well as setting clear
objectives to measure performance and delivery.
CheckIn performance management process
Inclusion
Purposeful
objectives
You
Your
role
Wellbeing
Building
your skills
Your
career
Shaping
your future
Continuous
development
STV Annual Report and Accounts 2022 49
Diversity and inclusion
Our strategy successfully enables us to build a more inclusive
culture, increase the diversity of our business and improve
representation and introduce new voices on screen.
Progress continues to be made against our stretching
targets and during 2023 we will set out new commitments
and targets for 2024 and beyond.
Through our five strategic priorities we are driving change
towards achievement of our targets set for the end of 2023.
Increase diversity
at all levels of the
organisation
Build diverse
talent networks
Create an
inclusive culture
Produce representative
and accessible
programme and
advertising content
Develop partnerships
to improve inclusion
across the industry
Recruitment and culture
We continue to build our talent networks, increase the range of
recruitment platforms and re-advertise positions if a shortlist
does not include candidates from under-represented groups.
During 2022, 60% of new recruits were female; 26% were
ethnically diverse; 13% were disabled and 16% identified
as LGBTQ+.
The STV Digital Accelerator Programme was launched in early
2022 to increase gender diversity at senior levels in STEM
related roles. To date, four members of our Digital team
have completed the programme.
We also continue to focus on establishing diverse future talent
pools at entry level and work with an expanding network of
partners including BE-United, WFTV, ShareMyTellyJob and
Bectu’s Take Two programme, to support recruitment of
females and entrants from ethnically diverse backgrounds.
Industry conversion programmes, supporting females to roles
traditionally undertaken by males, have been successful with
a number of trainees embarking on careers in the TV industry
from sectors as wide ranging as the construction industry (into
props trainee roles), customer service (into production roles)
and jewellery making (into trainee costume roles).
Our successful bursary programme delivered in partnership with
the Royal Television Society is now in its fourth year with over 30
scholars at various stages of a degree course currently receiving
a bursary for the duration of their studies. We supported the
Breaking Barriers programme for a second year. Run by Enable
Scotland and the University of Strathclyde, young Scots with
learning disabilities are provided with the opportunity to gain
a qualification and industry insights to improve their
employability prospects.
Creating an inclusive culture
A continuing programme of training – Creating Inclusive
Cultures – was delivered by the Company’s D&I Advisor, Femi
Otitoju, building on learnings from previous programmes and
supporting improved cultural competence and confidence for
colleagues. Additionally, bespoke training sessions exploring
the importance of lived experience in production for STV
Studios and representation and portrayal of modern Scottish
society in STV News were designed to support a deepening of
cultural competence, and provide colleagues with confidence
in managing diversity and inclusion issues specific to
operational requirements.
In 2023, a training programme to support the launch of the
Company’s transitioning policy, provide guidance for managers
to support colleagues experiencing menopause and support
for colleagues who are neuro divergent will form part of an
ongoing programme of equal opportunities training.
On-screen: Representation, portrayal and accessibility
Ensuring our audience is reflected and effectively portrayed in
our content is supported by targets to achieve gender balance
and increase the number of contributors from ethnically diverse
backgrounds in our news and current affairs programming.
These targets were met on STV News at Six (a 50:50 gender
balance and 9% ethnic diversity against a target of 8%). On
Scotland Tonight the target for gender balance was achieved
and a higher target of 12% of contributors from an ethnically
diverse background was only narrowly missed (11% achieved).
Developing a diverse contributor network
through STV Expert Voices
Over 700 people have participated in STV Expert Voices
receiving media training and networking opportunities and
10% have subsequently appeared on-screen as contributors
in our news and current affairs programming.
Five sessions were delivered in 2022, with three focussed
on improving gender balance and increasing the number
of ethnically diverse contributors on STV News and Scotland
Tonight, and two targeted at people identifying as disabled.
Continued expansion of this network will be achieved through
a new target to reach 1,000 people by the end of 2023 and the
launch of a contributor database to enable the STV News team
to deepen connections across with our ‘expert voices’.
OverviewStrategic ReportGovernanceFinancial StatementsAdditional Info 50 STV Annual Report and Accounts 2022
Social impact
STV Inclusion Fund
Launched to recognise and reward Scottish businesses
committed to diversity and inclusion, the STV Inclusion Fund
makes awards of gifted airtime and provides support with
advertising campaign development. The latest round of funding,
released in late 2022, will provide the opportunity for four winning
small and medium sized businesses to enter a competitive
pitch process and secure an advertising campaign on STV.
Our partners: Working with partners and stakeholders
to increase inclusion across the industry
We continue to work with a network of partners and industry
stakeholders to support the ongoing development of the
inclusion strategy, support representation of diverse talent across
the TV industry and create inclusive working environments.
Ofcom suspended their annual industry reporting process in
2022 to undertake a consultation to determine future monitoring
requirements. Although there was no formal obligation to
disclose diversity data, STV, along with seven industry peers
made a voluntary disclosure to maintain data monitoring
processes and support wider data gathering across the industry.
Our targets for 2023
Workforce: Our people
On screen contributors: Our audiences
Gender
50:50 balance across top 25% of roles by
earnings and a balanced gender profile
across the rest of the organisation
STV News at Six
News only
Sport only
Scotland Tonight
50:50
50:50
50:50
50:50
Ethnically
diverse
8% of colleagues based in Scotland
33% of colleagues based in London
8%
8%
8%
12%
Disability
12% of all colleagues
Target to be confirmed following a review of existing representation
levels. Through STV Expert Voices we are working to broaden our network
of contributors to increase representation of people with disabilities across
news and current affairs output.
LGBTQ+
4% of all colleagues
No target set
Our network of peer groups are empowered
to effect positive change across the business.
Expert Voices won the
Diversity Star Performer
accolade at the Herald
Diversity Awards in 2022.
Colleagues came together
for a Company-wide
celebration of their
collective achievements.
STV Annual Report and Accounts 2022 51
Gender pay profile
Understanding our profile
Across the Company, there is a balanced gender profile of 51%
women and 49% men. To address the mean gender pay gap,
which arises as a result of a higher proportion of men than
women in senior roles, we continue to make progress towards
our target to achieve gender balance across the top 25% of
roles as defined by earnings by 2023. 44% of these roles are
held by women, compared with 30% in 2017 when we first
started to report on the gender pay gap. At Board level (plc
and Management Board), 33% of roles are held by women.
Across all roles, the mean gender pay gap is 15.6%. This has
remained broadly level year on year, but has reduced by 31.5%
during the five years since 2017 when reporting began. In the
upper pay quartile the mean pay gap is 14.1%, however, if the
Management Board are removed from the calculation, this
reduces to just 2.3%. Across all other roles (75%), the mean
pay gap is 3.6%, down from 5.7% in 2021 demonstrating the
importance of achieving gender balance in roles in the upper
earnings quartile, the target set for the end of 2023.
The median gender pay gap, which reflects the difference in
the midpoints of the hourly rates of pay for men and women
has a higher level of volatility on the snapshot reporting date,
however, in the five year period since the first report in 2017,
there has been a reduction of 44% in our median gender pay
gap, from 17.3% to 9.7%.
The positive impact of measures implemented to support
women to progress through the organisation into senior roles
continues. These measures include succession planning, to
assess and strengthen our talent pipeline, and targeted career
development and talent acceleration programmes. In 2022,
64% of promotions were secured by women.
Closing the gender pay gap
21.0
18.5
21.0
11.9
15.6
14.6
15.3
15.6
8.3
8.0
9.7
8.6
2018
2019
2020
2021
2022
Mean pay gap %
Median pay gap %
Mean pay gap % excluding Management Board
Gender balance and pay gap by pay quartile 2022
Lower
Lower Middle
Upper Middle
Upper
-1.3%
1.7%
2.5%
14.1%
2.3% excluding
Management Board
45% Men
55% Women
44% Men
56% Women
51% Men
49% Women
56% Men
44% Women
The mean gender pay gap is 3.6% across 75% of all roles (2021: 5.7%).
Gender bonus gap 2022
Relates to bonuses paid over the period April 2021-March 2022
50.5%
mean
2021: 66%
0%
median
2021: 80%
People receiving a bonus 2022
Relates to bonuses paid over the period April 2021-March 2022
Gender bonus pay gap
Gender bonus pay gap reporting is prone to volatility when
making year on year comparisons due to a number of factors
that impact bonus payments, including the variable timing of
payment of bonuses from one year to the next. In the case of
our 2022 gender pay report, the reduction in the mean and
median bonus pay gap year on year is due to discretionary
bonus payments made in December 2021 which resulted
in all colleagues receiving a bonus payment. Excluding the
Management Board, the mean and median 2022 gender
bonus gap figures were 19.1% and 0% respectively.
93%
men receiving women receiving
bonus pay
bonus pay
95%
2021: 14%
2021: 14%
OverviewStrategic ReportGovernanceFinancial StatementsAdditional Info
52 STV Annual Report and Accounts 2022
Social impact
Sustainability
Our journey to become a net zero carbon business by the end
of this decade is firmly underway. 2022 has seen sustained
progress with significant milestones reached, key targets
delivered and new commitments introduced.
Delivering on our commitments – progress in 2022
Target
Progress
Implement governance framework
and continue to increase disclosure
and transparency
• Science Based Target Initiative* (SBTi) approval of our targets validating the STV Zero strategy
• Reporting aligned with the recommendations of the Taskforce for Climate-related Financial
Disclosure (TCFD)
• Sustainability governance framework embedded
Embed sustainability into the business
• Introduction of divisional action plans to integrate sustainability into all areas of the business
• Sustainability targets included in all management incentive plans
• Albert certification achieved on all programming produced by STV News, including Scotland
Tonight, and on 79% of UK-produced programming by STV Studios
Reduce energy consumption
• Target to halve business travel exceeded (against pre-pandemic levels)
• Completion of installation of energy efficiency measures designed to reflect new patterns
of office occupancy arising from hybrid working
Waste reduction
• Waste management audit undertaken and waste reduction targets to be introduced in 2023
• 100% of waste recycled at locations under the Company’s control**
• Target to reduce consumption of office paper by half exceeded (62% reduction year on year)
Promote sustainability on-screen
using STV’s reach
• Special feature programming to commemorate first anniversary of COP26
• Promotional airtime behaviour change campaign on-air in Q4
• Increase in sustainability and climate-related editorial in STV News content
Achieve a sustainable supply chain
by 2030
• Participation in the Carbon Disclosure Project’s (CDP) annual environmental disclosure
and scoring process
• Audit of largest value suppliers (85% of supplier base by value)
Our culture
• Commercial creative team completion of ‘Ad Net Zero Essential’ training
• On-boarding training in sustainability for all new joiners
* Application approved in accordance with the SBTi’s streamlined target-setting route for small and medium-sized companies.
** Pacific Quay, Aberdeen, Balmore storage site.
Increasing disclosure and transparency
Official validation by the Science Based Targets Initiative (SBTi)
that the targets underpinning STV Zero are consistent with the
goals of the Paris Agreement was confirmed in late 2022. This
external recognition of the efficacy of our strategy is a key
benchmark for our investors and other stakeholders and
provides a platform to extend our ambitions further, setting
additional stretching targets to achieve our commitment to
become a net zero carbon business by 2030. In addition to
emission reduction targets for Scope 1 and Scope 2 emissions,
targets to reduce Scope 3 emissions will also be defined.
A sustainable supply chain by 2030
Working with our suppliers to reduce carbon emissions across
our supply chain is a long-term target. In 2022 we participated
in the Carbon Disclosure Project (CDP) benchmarking STV
against companies globally and providing an independent
assessment of our approach. The findings of this process will
be used to inform our next phase action planning and target
setting, particularly in relation to our supply chain and
emissions reduction targets, in 2023 and beyond.
Supply chain focussed activity also included an audit of our
top 30 suppliers (representing 85% of invoices by value). The
introduction of sustainability criteria for existing suppliers in H1
2023 will support further collaboration across our supply chain.
Encouraging sustainable lifestyle choices
We are continuing to use the combination of the unrivalled
reach of STV’s marketing platform in Scotland and our close
and trusted connection with local communities to inform and
encourage behavioural change to more sustainable lifestyle
choices. The anniversary of COP26 was marked on-screen
with a climate focussed edition of Scotland Tonight in peak
time in addition to special feature digital content on STV News.
A successful airtime promo campaign – Small Changes Big
Difference – also ran over this period. A second series of Sean’s
Scotland was produced using newly developed commissioning
processes designed to incorporate sustainability themes, and
is a good example of us using the reach of STV to influence
audience behaviour and promote climate action. The series
featured local people involved in community-based projects
across Scotland, all of whom are addressing the impacts of
STV Annual Report and Accounts 2022 53
climate change and enhancing the natural environment. In
2023 a dedicated sustainability series has been commissioned in
addition to the continued coverage of climate and sustainability
stories in STV News and Scotland Tonight.
Scotland Tonight, and 79% of UK-produced programmes from
STV Studios has embedded sustainability into all aspects of
programme making, driving change in work processes and
the way we produce our great content.
To support a continued editorial focus on sustainability within STV
News, a content tracking system will be introduced in H1 2023.
Business travel halved
Our energy reduction strategy includes a target to address
one of the most significant contributors of carbon emissions
in the Company – business travel. This has created an area
for action that many colleagues can participate in as part of
a collective effort to reduce emissions. Initially this target was
set for achievement by the end of 2025, however, in a bid to
accelerate progress and in recognition of the opportunity
presented by new ways of working, this was brought forward
and has been achieved in 2022.
Sustainable productions
Achieving Project albert certification for all programming
produced by STV News, including current affairs programme
Working in partnership with Ad Net Zero, our teams involved in
commercial production and promotions have also incorporated
carbon impact calculation into their processes and will introduce
the Ad Green Carbon Calculator from 2023, providing a baseline
to measure carbon reduction in these activities towards a goal
of net zero.
Towards net zero by 2030
Looking ahead to 2023 and beyond, we have set further targets
to maintain momentum. This will include the introduction
of emissions reduction targets for Scope 1 and Scope 2
greenhouse gas emissions (market based). From a baseline
of 2019 (consistent with the target set to reduce business
travel), the aim will be to achieve a reduction of 72% by 2025.
Additionally, the development of systems to record Scope 3
emissions relating to employee commuting and upstream
transportation i.e. use of courier services, will continue.
Our partners
Target setting 2023 and beyond – towards net zero by 2030
Target
Progress
2023 target
2024 and beyond
Timescale for delivery
Continue to increase
disclosure and
transparency
Sustainability at the
heart of the business
• Continued review of sustainability-related risks through
Ongoing activity to mitigate risk
the Group’s risk management framework
• Introduce emissions reductions targets:
n/a
– Scope 1 and Scope 2 on a market-based approach:
Reduce by 72% by 2025 (from 2019 as base year)
– Scope 3: Define emissions reduction target by end of 2023
• Introduce climate content tracker in STV News programming
to measure coverage and provide baseline for introduction
of target in 2024
• Achieve Project albert certification on 100% of UK-produced
programming from STV Studios by end of 2023
Ongoing Scope 3 data
collection
Introduction of data
collection
Ongoing carbon impact
reduction to achieve
100% accreditation
Target set for end
of 2025
Introduction of
Scope 3 target
Introduce content
target
Reduce energy
consumption
• Introduction of office temperature and lighting control
measures in 2023
• Through membership of DIMPACT, undertake assessment
of digital carbon impact
Waste reduction
• Maintain 100% recycled waste at locations under the
Company’s control* in 2023
• Delivery of dedicated sustainability series on STV during 2023
• Re-launch STV Green fund to enable promotion of
sustainable goods and services
Implement programme
of measures
Data collection
and analysis
Continued energy
reduction including
review of gas supply
arrangements
Continued waste
reduction
Future waste reduction
strategy to be identified
Ongoing development of content via STV and
STV Player to educate and inform to influence
positive lifestyle changes
Using STV’s reach to
promote sustainability
Achieve a sustainable
supply chain by 2030
• Introduction of sustainability criteria for suppliers audited
Introduce in 2023
to date
• Participate in Climate Disclosure Project (CDP) in 2023
• Continued collaboration across entire supplier base
Participate in 2023
Ongoing from 2023
onwards
Extend to wider
supplier base
Our culture
• ‘Be an STV Zero hero’ behaviour change campaign key
theme of internal communications throughout 2023
Introduce from Q2
across the rest of year
Future campaigns to
be developed to align
with STV Zero strategic
priorities
* Pacific Quay; Aberdeen; Balmore storage site.
OverviewStrategic ReportGovernanceFinancial StatementsAdditional Info 54 STV Annual Report and Accounts 2022
Social impact
Contributing to our communities
STV Children’s Appeal has worked hard over the year to
support those most in need and help make a difference
to the lives of children affected by poverty.
The cost-of-living crisis had an adverse effect on Scotland’s most
vulnerable children and young people and to help ease some
of the financial burden on struggling families, Appeal-funded
charities and groups have been supporting families through
a focus on education, mental and physical health, training
and development and capacity building.
In the first three months of 2022, STV Children’s Appeal
distributed £1.2 million in winter grants to over 220 charities
and community groups across Scotland who used the funds to
provide essential items such as food, fuel, clothing and shelter.
A recipient of the emergency winter grant said:
“I was isolating and was running low on money, food, power
and nappies for my baby – I was so upset and worried. When
I called my key worker, she came to visit bringing food, milk and
nappies and returned with my prepayment key topped up so we
could keep ourselves warm. I’m told the funding came from the
Appeal – thank you so much.”
Fundraising activity
2022 was a busy year of fundraising activity. The Kiltwalk
returned, with all four events in Glasgow, Aberdeen, Dundee
and Edinburgh taking place in person for the first time since
before the pandemic. Hundreds of people walked for the
Appeal and raised £118,000.
In September, the STV Children’s Appeal Football Tournament
raised thousands for the Appeal thanks to the efforts of
enthusiastic STV staff and supporters.
October saw STV presenters Sean Batty and Laura Boyd take on
an intrepid Coast-to-Coast Challenge as they travelled between
Oban to Dundee in an electric Tuk-Tuk, competing in challenges
and meeting fundraising groups along the way who were raising
money for the Appeal.
In addition, scores of dedicated individuals, partners,
businesses, community groups and schools have undertaken
their own fundraising events – without this support, the work
of the Appeal simply could not happen. Longstanding partner
Lidl raised over £111,000, with staff and customers taking
part in a range of the fundraising events. Others joined
in by hosting their own Big Scottish Breakfast, with events
taking place across Scotland.
STV staff remain some of the biggest supporters of the Appeal.
Fundraising is co-ordinated and supported by a Company-wide
network of Appeal Ambassadors with staff getting involved
in all fundraising events or getting creative and finding their
own ways to boost donations. A number of STV daredevils
even took part in a sponsored zip slide across the River Clyde.
The final total raised by STV colleagues continues to be
match-funded by STV to ensure even more children and
young people can be helped.
Programming
As Scotland’s commercial Public Service Broadcaster, STV
is committed to using its platform as a force for good and
throughout the year has shone a spotlight on the incredible
work of a number of Appeal-supported charities including
Youth Scotland, MCR Pathways and Calum’s Cabin. Given the
unrivalled reach of STV’s broadcast channel and social media
platforms, these charity spotlights have helped to raise
awareness of projects across the country, provided them with
a platform to demonstrate the difference they are making to
children and families, and helped boost their support.
The fundraising year culminated with two key programmes
in November. This year’s documentary Scotland’s Stories: Let’s
Talk About Trauma followed presenter Aidan Martin’s journey
from addict to activist and author as he visited Appeal charities
doing incredible work to support children and young people.
A successful annual telefundraiser in November was hosted
at Street Soccer in Dundee by TV personalities Lorraine Kelly
and Sanjeev Kohli who confirmed the final total of £3.1m raised
in 2022. STV Children’s Appeal Show 2022 featured a host of
celebrities, young people and community heroes as well as
powerful case studies of those affected by poverty, showing
viewers at home why the work of the Appeal to tackle child
poverty continues to be so crucial.
STV presenters Sean
Batty and Laura Boyd
on their Coast to Coast
challenge.
STV Children’s Appeal’s
annual telefundraiser
was hosted by TV
personalities Lorraine
Kelly and Sanjeev Kohli.
STV Annual Report and Accounts 2022 55
Introduction to governance
Paul Reynolds
Chairman
Board evaluation
This year, the annual evaluation of Board effectiveness was
externally facilitated by Ceradas across December 2022 and
January 2023. Formal feedback and reporting was provided to
the Board in March 2023 and I am pleased to report it did not
find any significant issues. Details are provided on page 65.
UK Corporate Governance Code and section 172 Reporting
This report demonstrates how we have applied the principles
and complied with the provisions of the UK Corporate
Governance Code (the ‘Code’) during the year. Our Code
compliance statement can be found on page 60. Details
of how the Board discharged its duty under section 172 of
the Companies Act 2006 can be found on pages 12 and 13.
Looking ahead
As I note in my statement on pages 4 and 5, the long-term
fundamentals of our businesses remain sound. Despite a
challenging environment, we have delivered an overall strong
financial performance during the year and our businesses have
demonstrated that they are resilient. The Board is resolutely
focussed on delivering our diversification strategy – in the best
interests of our stakeholders.
Paul Reynolds
Chairman
7 March 2023
On behalf of the Board, I am pleased to present
the Corporate Governance report for the financial
year ended 31 December 2022.
The external headwinds we have faced this year in terms of the
turbulent economic and political environment and the evolution
of the media sector have been considerable. At these times it is
more important than ever that STV maintains its commitment
to the highest standards of corporate governance. It is essential
for the effective delivery of our strategy and long-term
sustainable business performance, generating value for
shareholders, and contributing to wider society. Throughout
this and other parts of the Annual Report, we aim to provide
investors and other stakeholders with an insight into the
governance activities which have supported our performance
during the year.
The Board has spent significant time this year focussing on
the delivery of our diversification strategy and underpinning
business operations. As part of these discussions the Board has
challenged the strategic priorities given the headwinds STV
has faced; enhanced our risk management and internal control
frameworks; advanced the STV Zero and Diversity and Inclusion
strategies; supported continued development of colleague
wellbeing programmes and further developed succession
plans; and both directly engaged in and provided oversight of
work undertaken by the STV team to maintain and enhance
stakeholder relationships. The Directors believe that the Board
is well placed to perform its stewardship role to ensure that the
Company continues to deliver long-term sustainable success.
We will continue to adapt our approach where necessary, to
promote and safeguard the interests of the Company and its
shareholders, and contribute to wider society in the future.
Board changes
Anne Marie Cannon, Independent Non-Executive Director and
Chair of the Remuneration Committee, will be stepping down
from the Board at the conclusion of the 2023 AGM. On behalf
of the Board, I would like to extend my thanks to Anne Marie
for the support, advice and challenge she has given to the role
since joining the Board in November 2014 and wish her every
success for the future.
A formal search was initiated in Q4 2022 and is underway
to recruit Anne Marie’s successor and we will announce
an appointment in due course.
OverviewAdditional InfoGovernanceFinancial StatementsStrategic Report 56 STV Annual Report and Accounts 2022
Board of Directors
As at 31 December 2022
Photos left to right
Paul Reynolds
Chairman
Simon Pitts
Chief Executive
Lindsay Dixon
Chief Financial Officer
Simon Miller
Senior Independent Director
Anne Marie Cannon
Non-Executive Director
David Bergg
Non-Executive Director
Ian Steele
Non-Executive Director
Aki Mandhar
Non-Executive Director
STV Annual Report and Accounts 2022 57
Paul Reynolds
Chairman
Appointed: February 2021
Committees: Nomination (Chair)
Paul has over 30 years international public-company experience
as a chairman, non-executive director and senior executive,
including tenures as Chief Executive of BT Wholesale and
Executive Director of BT Group plc and Chief Executive of Telecom
New Zealand Ltd. He is currently Chairman at Computershare
(Australia) Ltd in Melbourne and a Non-Executive Director of
Tosca IOM Ltd, the holding company of TalkTalk Telecom Group.
He has held previous roles as Chairman of data analytics fintech,
9 Spokes Ltd and as Non-Executive Director at Eircom Ireland
Limited, XConnect Global Networks Ltd and Japan-based
telecommunications company, eAccess Ltd. Paul is Chairman
of the STV Children’s Appeal.
Lindsay Dixon
Chief Financial Officer
Appointed: May 2019
Lindsay is a Chartered Accountant with extensive commercial
experience gained across a range of sectors covering the
FTSE 100, 250 and large private companies. Previously,
Lindsay held the role of Group Financial Controller at William
Grant & Sons Limited and prior to that was Group Financial
Controller of The Weir Group plc. In addition to her core
financial responsibilities, she has wide ranging M&A, investor
relations and international experience. Lindsay qualified with
Deloitte in 2002.
Simon Pitts
Chief Executive
Appointed: January 2018
Appointed to the Board in January 2018, Simon set out a
growth strategy to transform STV into a digital streaming and
IP-led media business. After a period of consistent growth, STV
posted record financial results in 2021. Previously, Simon was
on ITV’s executive board as Managing Director, Online, Pay TV,
Interactive & Technology. Over a 17-year career there, he held
a range of senior roles and, as Director of Strategy, was one of
the main architects of the company’s strategic transformation
under Archie Norman and Adam Crozier. Simon was on the
board of ITN for eight years and prior to ITV, worked in the
European Parliament. He is Vice Chair of the Royal Television
Society and trustee of the STV Children’s Appeal and of
pre-school literary charity Oscar’s Book Prize.
Simon Miller
Senior Independent Director
Appointed: December 2016
Committees: Audit & Risk; Nomination; Remuneration
Simon is an experienced non-executive director and chairman
with exposure to a wide range of financial, commercial and
manufacturing businesses. Simon is Chairman of Hampden &
Co, private bankers, and Bankers Investment Trust. Simon was
formerly Chairman of Blackrock Sustainable American Income
Trust and Brewin Dolphin Holdings PLC and a Non-Executive
Director of Scottish Friendly Assurance Limited. Simon read
Law at Cambridge and is a Barrister at Law.
Anne Marie Cannon
Non-Executive Director
Appointed: November 2014
Committees: Audit & Risk; Remuneration (Chair)
David Bergg
Non-Executive Director
Appointed: May 2018
Committees: Audit & Risk; Remuneration
Anne Marie has over 40 years’ experience in the energy industry
and investment banking and is an experienced director, holding
executive and non-executive roles. She is currently Deputy Chair
at Aker BP ASA, and a Non-Executive Director at the privately
owned Aker Energy AS. In addition, she is a Senior Advisor in the
Strategic Advisory business at PJT Partners. Anne Marie was
formerly a Non-Executive Director of Harbour Energy plc. She
was previously a Senior Advisor at Morgan Stanley and has also
held financial and commercial roles at Shell UK, Schroder Wagg
and Thomson North Sea, as well as Executive Director positions
on the boards of Hardy Oil and Gas and British Borneo.
Ian Steele
Non-Executive Director
Appointed: November 2015
Committees: Audit & Risk (Chair); Nomination; Remuneration
Ian qualified as a Chartered Accountant in 1980 with Arthur
Young McClelland Moores. His subsequent career involved time
with The British Linen Bank, Touche Ross, Rutherford Manson
Dowds and Deloitte. Ian retired as Senior Partner for Deloitte in
Scotland and Northern Ireland in 2015 and prior to retiring, had
been on the UK Board of Deloitte LLP for over eight years. Ian
was a Corporate Finance Advisory Partner with Deloitte and
was Head of Global Advisory for three years. Ian is currently a
Non-Executive Director of Continuum Advisory Partners and he
was formerly Chairman of Iomart Group plc. Ian is a member
of the Constitutional Panel of ICAS.
David has worked in the broadcasting Industry for over 30
years at ITV, the BBC, Sky, TV-am and Channel Five. He started
his career in several ITV regional audience research teams
(including Grampian Television), before moving into marketing
and programme acquisition roles and then embarking on a
succession of senior scheduling positions. David was Director
of Programme Strategy at ITV for 20 years from 1997 to 2017
and retains extensive contacts at senior levels in the broadcast
and programme production sectors in the UK and USA.
Aki Mandhar
Non-Executive Director
Appointed: February 2021
Aki has built a successful executive career across the advertising,
marketing and digital media sectors and is General Manager,
International of the sports media company, The Athletic, which
was successfully acquired by The New York Times in 2022. Prior
to joining The Athletic in early 2020 to establish the soccer arm
of the business, she was Chief Operating Officer of Telegraph
Media Group, responsible for delivery of the strategy to
transform the business from a traditional publisher model into
a successful, sustainable subscription-based business. Aki was
UK Managing Director of Omnicom Group Agency, OMD from
2015 until 2017 and prior to this held executive roles within
MediaCom over a period of nine years.
Eileen Malcolmson
Company Secretary
OverviewAdditional InfoGovernanceFinancial StatementsStrategic Report 58 STV Annual Report and Accounts 2022
Board of Directors
As at 31 December 2022
Board at a glance
Board and Committee composition and attendance at scheduled
meetings from 1 January 2022 to 31 December 2022 1
Board member
Attendance:
Paul Reynolds (Board Chairman)
Executive Directors
Simon Pitts
Lindsay Dixon
Non-Executive Directors
Simon Miller 2
Anne Marie Cannon
Ian Steele
David Bergg
Aki Mandhar
Board
Audit & Risk
Committee
Remuneration
Committee
Nomination
Committee
8/8
8/8
8/8
8/8
8/8
8/8
8/8
8/8
3/3
3/3
3/3
3/3
3/3
2/3
3/3
3/3
3/3
3/3
3/3
3/3
1
2
Data is based on scheduled meetings from 1 January 2022 to 31 December 2022 only.
Additional ad hoc meetings of the Board also took place during the year.
Unable to attend a Remuneration Committee meeting due to unforeseen personal reasons.
STV’s Board skills matrix
Governance
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Board of Directors
composition
Board diversity
Tenure of Non-Executive
Directors and Chairman
12.5% Chairman
25.0% Executive Directors
62.5%
Non-Executive
Directors
37.5% Female
62.5% Male
33.3% More than 6 years
33.3% 4-6 years
0%
2-4 years
33.3% 1-2 years
0%
Less than 1 year
STV Management Board
STV Annual Report and Accounts 2022 59
Photos left to right
Simon Pitts
Chief Executive
Lindsay Dixon
Chief Financial Officer
Helen Arnot
Legal Director
Suzanne Burns
HR and Communications
Director
Bobby Hain
Managing Director,
Broadcast
George Harris
Director of Operations
and Delivery
David Mortimer
Managing Director,
Studios
Peter Reilly
Commercial Director
Richard Williams
Managing Director, Digital
OverviewAdditional InfoGovernanceFinancial StatementsStrategic Report 60 STV Annual Report and Accounts 2022
Corporate governance report
Compliance with the Code
STV and its Board of Directors are fully committed to upholding the highest standards of corporate governance as these are
crucial to overall business integrity and performance. The Annual Report and Accounts for the year ended 31 December 2022
has been prepared in accordance with the provisions of the UK Corporate Governance Code 2018 (the ‘Code’), available at
www.frc.org.uk and the Board’s view is that it has complied with all relevant provisions of the Code.
Responsibilities of the Board
The role of the Board is to provide effective and entrepreneurial leadership of the Group for the purposes of promoting long-term
sustainable success, generating value for shareholders, and contributing to wider society. This requires the Board to take high-quality
strategic decisions, promote the desired culture and ensure there is a robust system of internal controls and risk management whilst
monitoring the financial and operational performance and overseeing performance against our ESG ambitions. The Board ensures
that the necessary funding and talent are available to the business to meet its objectives and measure performance against them,
and that effective succession planning arrangements, remuneration policies, governance arrangements and a framework of sound
business ethics are in place.
The Board recognises that engaging with, and acting on the needs of, the Group’s stakeholders is key to achieving the strategy
and long-term objectives of the Company. Read more about how the Board engages with stakeholders and the Directors’
statement of compliance with their duties under section 172 of the Companies Act 2006 on pages 12 and 13.
At the date of this report, the Board comprises the Chairman, two Executive Directors and five Independent Non-Executive
Directors. The names of the Directors together with their biographies, including their skills and experience are on pages 56 to 58.
Board governance framework
Board of Directors
Responsible for the overall leadership of the Group.
Nomination Committee
Responsible for reviewing Board
composition and diversity, proposing
new Board appointments, and
monitoring the Board’s succession needs.
Remuneration Committee
Responsible for remuneration policy,
performance linked pay schemes and
share-based incentive plans. Determines
the remuneration packages for Executive
Directors and certain other senior Group
employees and reviews workforce
remuneration and related policies,
including alignment with the
Company’s culture.
Audit & Risk Committee
Responsible for monitoring the integrity
of the Group’s financial reporting and
disclosures, reviews the Group’s risk
management framework and internal
controls, reviews the activities and
performance of internal audit and the
external auditor, and monitors the
Group’s whistleblowing procedure.
Responsible for executing strategy and day-to-day management.
Chief Executive
Management Board
Responsible for assisting the Chief Executive in discharging his responsibilities
ensuring alignment on business priorities, investments and actions, supported
by divisional boards for each of Broadcast, Digital and Studios.
Management committees
Underlying this governance framework, STV has established various committees
and groups which focus on specific aspects of the Group’s ESG practices including
the Diversity and Inclusion Steering Committee and the Sustainability Group, each
of which bring together colleagues from across the business to support the
Management Board with execution of their day-to-day responsibilities.
STV Annual Report and Accounts 2022 61
The Board discharges some of its responsibilities directly and delegates others through the Board Governance Framework.
This enables the Board to spend a greater proportion of its time on strategic, forward-looking matters.
The Board is supported by its Committees which make decisions and recommendations on matters delegated to them. The Board
has three main committees, the Nomination Committee, Remuneration Committee and Audit & Risk Committee. The terms of
reference for each Committee are available on the Group’s website at www.stvplc.tv.
From time to time, the Board may also establish special purpose Committees to assist it in overseeing specific areas and usually
such Committees operate only for a defined period – for instance, a Committee was constituted to support decision-making and
analysis underpinning our recent partnership with ITV to secure original, exclusive, extended preview content for STV Player.
Although a wide range of the Board’s powers and authorities are delegated to the Executive Directors and Management Board,
the Board retains ultimate responsibility and authority for their exercise.
The Board Governance framework facilitates responsive and effective decision-making, ensuring that the Board and its
Committees, the Executives and Management Board are able to collaborate proactively, consider issues and respond.
The principal Committees of the Board, the Executives and Management Board are described in the Board Governance Framework
diagram overleaf. Environment, Social and Governance (ESG) is a core part of our broader Group strategy and is therefore embedded
into our Board Governance framework. Details of the ESG responsibilities of the Board and Committees, Management Board and
Divisional Boards are detailed on page 42 of the TCFD report.
The division of responsibilities of the Directors
The Board comprises Executive and Non-Executive Directors, which ensures that no individual or small group of individuals dominates
the Board’s decision-making. All Non-Executive Directors, except for the Chair of the Board, are considered to be independent in
character and judgement. The Chair of the Board was considered to be independent on appointment. The role of Chairman and
Chief Executive are separate and have a clear division of responsibility that is set out in writing and approved by the Board.
The roles and responsibilities of Board members are detailed below and demonstrate a clear division between the roles and
responsibilities of the Board and Executive management.
Chairman
Leading the Board and
ensuring its overall
effectiveness in discharging
its duties
Chief Executive
Leading the implementation
of the Group’s strategy set by
the Board
Executive Director –
Chief Financial Officer
Supporting the Chief Executive
in the implementation of the
Group’s strategy set by the
Board
Independent Non-Executive
Director
Ensuring that no individual
or small group of individuals
can dominate the Board’s
decision-making
Paul Reynolds leads the Board and is responsible for its overall effectiveness. He is expected to
demonstrate objective judgement, to promote a culture of openness and constructive challenge and
debate between all Directors and to promote high standards of corporate governance. The Chairman
sets the Board’s agenda and ensures the Board receive accurate, clear and timely information, and are
given adequate time for discussion and debate. He also leads Board succession planning, ensures that
Board induction, evaluation and development are a priority, and seeks to ensure effective communication
with shareholders.
The Chairman met regularly with the Senior Independent Director and Non-Executive Directors
separately outside the formal meetings during the year.
As Chairman, Paul also leads the Nomination Committee.
The Chief Executive, Simon Pitts, has been delegated responsibility from the Board for the day-to-day
running of the business and, supported by the Management Board, he is responsible for ensuring its
effectiveness in managing the overall operations and resources of the Group and leading the
implementation of the Group’s strategy.
The Chief Financial Officer, Lindsay Dixon, is an Executive Director and member of the Board as well
as the Management Board and supports the Chief Executive by providing financial leadership in the
implementation of the strategic business plan and alignment with financial objectives.
The Independent Non-Executive Directors Anne Marie Cannon, David Bergg, Ian Steele, Aki Mandhar,
and the Senior Independent Non-Executive Director Simon Miller comprise more than half of the Board
membership. They bring diverse business and commercial experience, objective judgement and
specialist advice which inform Board discussions and decision making and are a major contributing
factor towards the proper functioning of the Board and its Committees, ensuring that all matters
are debated, and that no individual or group dominates the Board’s decision-making process. They
provide constructive challenge, giving strategic guidance, offering specialist advice and hold executive
management to account. Led by the Nomination Committee they are responsible for the appointment
and removal of Executive Directors and determine the remuneration of Executive Directors through the
Remuneration Committee.
>>
OverviewAdditional InfoGovernanceFinancial StatementsStrategic Report 62 STV Annual Report and Accounts 2022
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Senior Independent Director
Providing a sounding board
for the Chairman of the Board
and serving as an intermediary
for other Directors and
shareholders
The Senior Independent Director, Simon Miller, provides a sounding board for the Chairman and,
if necessary, acts as an intermediary for the other Non-Executive Directors. He is also available
to shareholders to discuss any concerns that have not been addressed through the normal
engagement channels. He leads on the ongoing monitoring and annual evaluation of the Board
Chairman’s performance.
As part of his role, he meets with the Non-Executive Directors without the Board Chairman at
least annually.
Designated Non-Executive
Director for workforce
engagement
Providing an effective
engagement mechanism
for the Board to understand
the views of the workforce
Simon Miller, the Senior Independent Director, is also STV’s Employee Director and in this capacity he
attends meetings of the employee forum, which meets quarterly and comprises representatives from
every team and location. He also makes site visits to the Company’s offices to meet and talk to a wider
group of colleagues. Simon Miller also meets on a bi-monthly basis with the HR & Communications
Director to discuss employee engagement activities and plans, including the employee opinion survey.
He brings the views and experiences of the workforce into the boardroom and enables the Board to
consider the views of the workforce in its discussions and decision-making.
Board and Committee operations
The structure of each Board and Committee meeting seeks to facilitate open discussion and debate and ensure adequate time
for Directors to consider all agenda items and related proposals.
Meetings are held through a combination of virtual attendance and, following the end of Covid-related restrictions, in person with
the latter rotating around the various offices occupied by the Group. The Board held eight scheduled meetings during the year and
attendance is set out on page 58. There were two additional ad hoc meetings convened during the year, when matters required
to be brought to the Board’s attention or when decisions were required outside the formal meeting schedule.
All Directors are expected to attend all meetings of the Board and the meetings of the Committees on which they serve, and
the AGM. When a Director is unable to attend or dial in to a Board or Committee meeting, he or she receives the papers for
consideration at that meeting and has the opportunity to provide feedback on the matters under consideration via the Chair
of the relevant body in advance of the meeting.
Non-Executive Directors, including the Chairman, are informed of the minimum time commitment required prior to their
appointment and they are required to devote sufficient time to the Company to effectively discharge their responsibilities. The
Board therefore monitors the extent of Directors’ other interests and the time commitment required to fulfil those interests to
ensure that the effectiveness of the Board is not compromised. A Directors’ preparation for, and attendance at, Board and Board
Committee meetings is therefore only part of their role as they are expected to devote such time to the affairs of the Group as
is necessary to enable them to perform their duties as Directors. The Board is satisfied that the Chairman and each of the
Non-Executive Directors devote sufficient time to their duties.
Each Director has a duty under the Companies Act 2006 to avoid a situation in which they have, or might have, a direct interest that
conflicts, or possibly may conflict, with the interests of the Company. This duty is in addition to the obligation owed to the Company
to disclose to the Board an interest in any transaction or arrangement being considered by the Company. The Company’s articles
of association authorise the Directors to approve such situations and to comply and to apply other provisions to allow conflicts
of interest to be dealt with. There were no actual or potential conflicts of interest during the financial year 2022.
The Board has adopted a schedule of matters reserved for its decision and a rolling annual plan of items for discussion. There are
terms of reference for the Board Committees and these can be found on our website at www.stvplc.tv.
The Board schedule of reserved matters and the principal matters set down are approval of:
• Financial statements and shareholder circulars; dividend policy; significant changes in accounting policies or practices;
• Board and Committee appointments and terms of reference, terms of conditions of Non-Executive and Executive Directors;
• The Company’s long term objectives and commercial strategy; annual operating and capital expenditure budgets and 3 Year Plan;
• Material contracts and significant variations in the terms of the Company’s borrowing facilities;
• Corporate activity, which is subject to the City Code on Takeovers and Mergers, or of a material nature;
• Major changes to the Company’s pension schemes, share schemes and treasury policy;
• Risk management policy and strategy, including the risk appetite statement and internal control policies; and
• Corporate governance arrangements including the approval of the Company’s Sustainability Policy and Diversity and
Inclusion Policy.
STV Annual Report and Accounts 2022 63
Strategy
The Board considered strategy and associated matters at each of the Board meetings throughout 2022, and therefore spent a good
proportion of its time considering longer-term and broader strategic issues.
Rather than having a stand-alone Board Strategy Day during the year, it was agreed that each of the Divisional Managing Directors
would present to Directors on the overall strategy for their area of the business, their proposed three year plan and the risks and
opportunities facing their division across the year. This allowed the Non-Executive Directors to build on their knowledge of STV’s
business and provided them with regular opportunities to ask questions of and challenge the divisional heads. The Board was also
able to devote more time than would have been possible in a single day and provided an opportunity to perform a ‘deep dive’ into
each key areas of the business. The Group Commercial Director joined both the Broadcast and Digital sessions given the importance
of advertising revenues in those areas.
Being a responsible business and delivering on ESG has been high on the Board’s agenda this year.
Workforce engagement
As Board meetings are held at the various offices of the Group, the Chairman and Non-Executive Directors were able to spend time
on-site meeting with management and other employees. The Employee Director, Simon Miller, also visited each of the Group’s
offices outside the Board schedule, and participated in the Employee Voice Forum. These activities, as well as Board papers
providing updates on workforce engagement, provide the Board with valuable insights into the operation and culture of the
business and have a positive impact on the quality of discussions at Board meetings and decision-making generally.
Diversity and Inclusion strategy
The Board together with management, remains focussed on building a supportive and inclusive culture that ensures equality of
opportunity for all and driving measurable progress. In 2022 the topic was formally scheduled tri-annually as a standing Board
agenda item.
The Board discussed the activities in this area which focussed on our Open Access Charter which captures the commitments that
have been identified to improve diversity and inclusion for employees and extends to our audiences and partners. It reviewed
the progress against challenging targets set to achieve the priorities identified for delivery by the end of 2022. It acknowledged
STV’s continuing commitment to using its privileged position as an employer, Public Service Broadcaster and producer to address
the longstanding systemic issue of racism and improve the representation of Black, Asian and Minority Ethnic people both on and
off screen.
Further details of consideration of the Diversity and Inclusion Strategy in relation to the composition of the Board can be found in
the role of the Nomination Committee on pages 67 and 68.
Board
Management Board
Staff
37.5% Female
62.5% Male
33.3% Female
66.7% Male
51.5% Female
48.5% Male
Succession
During the year, in addition to the Board and Committee composition matters discussed at the Nomination Committee found
on page 67, the Board considered a paper on succession planning for the Executive Directors, Management Board, senior roles
(direct reports to the Management Board) and other key operational roles across the Group. As part of this, the Board considered
the depth and quality of the succession pipeline, the skills and capabilities required for the future strategic needs of the business,
retention and succession planning risks, and personal development, as well as diversity targets and the work undertaken to close
the gender pay gap.
STV Zero strategy
In 2022, the Board received tri-annual reports from management on progress against targets set down in STV Zero, the Group’s
sustainability strategy, as well as broader engagement activities across the Group intended to ensure that sustainability was at
the forefront of decision-making and operations as much as possible. The Board reviewed updates on progress against 2022 and
longer-term STV Zero targets and noted that all key targets were on track and that additional targets were being set for 2023,
including targets for carbon emission reductions. In addition to these operational updates, the Board formally reviewed and
approved the climate-related risk register and related governance framework, originally approved in December 2021. Further
details can be found in the TCFD report on pages 42 to 45 and Social impact report on pages 47 to 54.
The Board concluded that the Diversity and Inclusion strategy and STV Zero strategy were increasingly embedded and integrated
into the business throughout 2022, and it would continue to drive and oversee the progress in these areas in 2023.
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Board activities in 2022
The Board executed its responsibilities across the full suite of core activities during the year, with the main focus set out below:
Strategy
• Considered the Group’s diversification strategy in light of viewing and competitive trends, the turbulent macroenvironment
and evolution of the media sector
• Reviewed the growth plans for each business including strategy presentations from each of the Divisional Managing Directors
• Approval of investment in entertainment production company Mighty Productions and an extended partnership with drama
producer TOD Productions, as well as consideration of other potential investments
• Triannual updates provided on implementation of ESG including STV Zero, the Group’s sustainability strategy, and the Diversity
and Inclusion Strategy
• Approval of an enhanced partnership with ITV to bring extended, exclusive preview content to Scotland on STV Player
• Discussion of various regulatory and legislative issues
Operational and financial performance, including monitoring
• Operational and financial updates for each business area at each Board meeting, including major project summaries and Legal
and Compliance reporting
• Monthly finance reports, including details of performance against budget/latest forecast, review of cashflow and assessment
of balance sheet and net debt
• Approval of the Annual Report & Accounts, including assessment of the going concern basis of preparation and Viability Statement
• Approval of the Interim Financial Accounts including assessment of the going concern basis
• Approval of trading updates
• Approval of budget and three year plan
• Approval and declaration of interim and full year dividends
Risk management
• Approvals of the Group’s Risk Appetite in March and an updated Risk Appetite Statement and Risk Management Policy and
Framework in December
• Assessment of the Group’s principal and emerging risks
• Review of the Group risk register and identified mitigating controls
Investor Relations
• Review of institutional feedback following meetings between the Executive Directors and shareholders after both the full and
half year results
• Capital Markets event on Studios division, held in June
• Regular reporting from brokers on markets, trading and activity in STV shares
• Review of the draft analysts’ results presentations, when reviewing the Company’s full and half year financial results
Culture and governance
• Succession planning review
• Annual Performance Evaluation FY21
• Externally facilitated effectiveness review of the Board and its Committees for FY22
• Engagement with staff via our Employee Voice Forum and employee survey
• Approval of AGM notice and arrangements
• Approval of Fees to be paid to Non-Executive Directors and annual minimum time commitments
• Approval of the appointments/resignations of the Company Secretary
• Updates on Corporate Governance and Pension governance
• Information on changes to the STV Children’s Appeal
Board support and the role of the Company Secretary
The role of the Company Secretary is to support the Chairman of the Board and ensure the Directors have access to the
information they need to carry out their roles. She provides a channel for Board and Committee communications and is a link
between the Board and management. The Company Secretary must ensure that all Board and Committee procedures are
complied with and advise on corporate governance and related regulatory compliance. She facilitates Director induction,
professional development and Board evaluations overseen by the Board Chairman.
The Company Secretary is also responsible for ensuring that the Board and Committees receive accurate, clear and up-to-date
information in sufficient time for them to review it before each meeting and are provided with sufficient resources to discharge
their respective duties. In addition, and separate to the support provided by the Company Secretary, the Directors have access
to independent professional advice at the Group’s expense.
Training, development and induction
All Directors are given a comprehensive induction to the Company’s business and their development and training is an ongoing
process. Throughout their period in office the Directors are regularly updated at Board meetings on the Company’s business, the
macro and competitive environments in which the Company operates and any other significant changes affecting the Company
and the market sector of which it is a part. In addition, the Board regularly receives presentations from senior managers within the
Company and from Company advisors to ensure that Directors’ knowledge, skills and familiarity with the Company’s businesses
are maintained. Directors are also provided with, and encouraged to take up, opportunities to meet major shareholders. These
activities are supplemented with separate conversations between individual Non-Executive Directors and members of the
Management Team to pick up on specific points as they arise.
STV Annual Report and Accounts 2022 65
Board effectiveness review
The effective functioning of the Board is key to the success of the Company. STV recognises that an annual Board effectiveness
review is a valuable feedback mechanism for the Board in driving its performance, optimising the strengths of individual Directors,
and highlighting areas for further development.
In accordance with the Code, an externally facilitated evaluation is carried out every three years, and to comply with this
requirement, the Board requested Ceradas Ltd, a third party provider of board evaluation services, carry out the 2022 evaluation.
The review was conducted across December 2022 and January 2023 by Chris Stamp of Ceradas who then presented his report to
the Board at its meeting in March 2023.
There were three stages of the review as follows:
• Stage 1: The evaluation commenced in December 2022 with an analysis of key Board and governance documentation intended
to inform areas to focus on in the interviews. On completion, an aide memoire was prepared and agreed with the Chairman
before being circulated to interviewees.
• Stage 2: During early January 2023, individual interviews were held with each Director, the Company Secretary and the members
of the Management Board who regularly attend Board meetings, namely the HR & Communications Director and the Heads of
the three divisions.
• Stage 3: At the end of January 2023, a report was prepared setting out the findings from stages 1 and 2 and recommendations
for potential improvements in Board effectiveness. The draft report was first discussed with the Chairman prior to being
circulated to the Board.
Board evaluation insights
The review concluded that the Board has many strengths, including: its culture, respectfulness and collective spirit; the high levels
of engagement and willingness of all Directors to contribute; its broad and high-quality range of experience; the quality of its
support of, and challenge to, the senior executive team; and its ability to step up to the plate when particular challenges have
presented themselves.
Whilst the report did not identify any significant areas of weakness in the effectiveness of the Board and its Committees, it provided
recommendations to the Board as opportunities to enhance its current operations. The Board has considered these recommendations
and in response has proposed to take the following actions:
• consider ways in which the Board’s review of strategy should evolve over the coming years as the Group approaches the next
stage of its diversification;
• review the whistleblowing processes and channels to the Board and re-launch an awareness campaign of whistleblowing
procedures to all groups of the workforce;
• identify ways in which the Board could more regularly, and informally, engage with various groups of stakeholders, including
shareholders and the wider workforce;
• develop a mentoring programme for potential future leaders in the Group and Board members.
The action plan will be monitored over the next 12 months and the progress and outcomes will be reported in the 2023 Annual Report.
The Committees were also provided with specific recommendations to enhance their current operations which are currently being
considered. These will be added to the action plan and monitored over the next 12 months.
The individual performance of Directors was considered as part of the review, and it concluded that all Directors had demonstrated
fulsome commitment to their roles and contributed effectively.
Shareholder engagement
STV believes that open and regular dialogue with investors is the basis of a trusted relationship. Its corporate website (www.stvplc.tv)
has information for institutional and private shareholders alike and shareholders seeking information may contact the Company
directly throughout the year. In addition, STV has an electronic communication facility to allow shareholders to receive information
more quickly and in a manner convenient for them.
The Board recognises the importance of having continual engagement with its shareholders and fully supports the principles
of the Code that encourage open dialogue between companies and their shareholders. The Board welcomes and encourages
participation of all shareholders at the Company’s Annual General Meeting.
In addition, STV undertakes a comprehensive programme of meetings and events for institutional investors, research analysts
and the financial press throughout the year.
The Chairman, the Senior independent Director and other Non-Executive Directors are available to meet with shareholders to
discuss governance and strategy and develop a balanced understanding of their issues and concerns. Various meetings have
taken place with shareholders during the year. Discussions at these meetings are conveyed to all Directors in order that each
can develop an understanding of major shareholders’ views on the Company.
OverviewAdditional InfoGovernanceFinancial StatementsStrategic Report 66 STV Annual Report and Accounts 2022
Corporate governance report
Minority voting
At the 2022 Annual General Meeting of STV Group plc all resolutions were successfully passed with the requisite majority of votes,
although there were more than 20% votes cast against the four Resolutions set out below:
• Resolution 2, to approve the Directors’ Remuneration Report (the ‘Remuneration Report’) was approved by 74.98% of votes cast
• Resolution 8, to approve the re-election of Anne-Marie Cannon as a Director was approved by 73.79% of votes cast
• Resolution 14, to approve the Directors’ authority to allot shares was approved by 78.76% of votes cast
• Resolution 15, to approve the Directors’ authority to disapply pre-emption rights was approved by 78.80%.
The Company noted that primarily one shareholder with a significant holding voted against each of these Resolutions.
As such, in accordance with the Code, the Company provided within six months after the Annual General Meeting a letter to the
Investment Association for inclusion within its Public Register on the views received from shareholders and actions taken as a
result of the dissenting votes received.
With respect to Resolution 2, the advisory vote on the Company’s Annual Report on Directors’ Remuneration for the year ended
31 December 2021, the Company believes that the significant shareholder who voted against has a particular position on one
specific element of the Company’s Remuneration Policy (approved by a clear majority of shareholders at the Annual General
Meeting 2021). This same shareholder also voted against Resolution 8 (re-election of Anne-Marie Cannon), a vote linked to her
role as Chair of the Remuneration Committee and therefore an extension of their position on Resolution 2.
The Company had within the first six months of the 2022 Annual General Meeting undertaken further dialogue with this shareholder
who is generally supportive of the Company’s overall approach to executive remuneration. Having further considered the matter,
and given the support of the majority of shareholders who have been seen to support the decisions and recommendations of the
Remuneration Committee, the Company does not propose to take any further action at this time.
The Company remains dedicated to ongoing engagement with shareholders on the matter of executive remuneration whilst
continuing to conform to evolving governance and best practice. The triennial review of the Remuneration Policy will be undertaken
in the latter part of 2023 and views expressed by shareholders will be considered in this process, ahead of seeking shareholder
approval at the 2024 Annual General Meeting.
With respect to resolution 14 (Directors’ authority to allot shares) and Resolution 15 (Directors’ authority to disapply pre-emption
rights), whilst the Company recognises the views of this shareholder, these Resolutions were supported by the majority of its
shareholders and are in line with prevailing UK market practice. The Company continues to consider that these levels of authority
are appropriate to maintain flexibility and to be in the best interests of the Company.
STV Annual Report and Accounts 2022 67
Governance Committee reports
Committee activities
The principal activities undertaken by the Board Committees during 2022 included:
Month
January
February
Committee
Activity
Remuneration
• Approval of 2021 Incentive outcomes
• Approval of 2022 Incentive target setting
Nomination
• Composition of the Board and Committees
and succession planning
• Annual Report/AGM
• Time commitments of Non-Executive Directors
• Annual Performance Evaluation 2021
• Recommended to the Board all
Non-Executive Directors to be put
forward for re-election at the AGM
February
Remuneration
• Approval of Directors’ Remuneration Report
• Committee Performance Review 2021
March
Audit & Risk
• Review of Year End Results
• Review of External Audit report on Year End Results
• Review of Annual Report
• Risk Review and assessment, and internal control
• Review of Independence of Auditors
• Committee Performance Evaluation
• Review of Internal Audit Reports
• Corporate Governance updates
effectiveness and approval of Risk Appetite statement
June
Nomination
• Initial discussion on Non-Executive Directors
• Review of Committee membership
June to August
Audit & Risk
• Audit Tender process
recruitment
September
Audit & Risk
• Review of Half Year Results
• Review of external auditors’ report on Half Year Results
• Internal Audit Report
• Review of risk management and
internal controls
November
Audit & Risk
• Review of external audit plan for 2022
• Approval of Internal Audit Plan for FY2023
• Internal Audit progress report
• Approval of Group Risk Management
Policy and Risk Appetite Statement and
updates on internal controls
December
Nomination
• Non-Executive Director recruitment
• Overboarding review
December
Remuneration
• Update on Company-wide remuneration matters
Report from the Remuneration Committee
The members of the Committee, all of whom were independent during the year, were:
Anne Marie Cannon (Chair)
Ian Steele
David Bergg
Simon Miller
The role and activities of the Remuneration Committee are described within the Directors’ Remuneration Report which can be
found on pages 72 to 87.
Report of the Nomination Committee
The members of the Committee, comprising two independent Non-Executive Directors and the Chairman of the Board
(independent on appointment), were:
Paul Reynolds (Chair)
Simon Miller
Ian Steele
The Committee met three times during the year. At the invitation of the Committee, meetings are attended by the
HR & Communications Director and the Chief Executive.
The principal activities undertaken by the Committee during 2022 have been summarised below.
Composition of the Board
The Board is structured to ensure it has an appropriate combination of skills, experience, knowledge, and diversity required for
its effectiveness and is fully equipped to support the Group to drive the next stage of its diversification strategy. The Board skills
and experience matrix on page 58 demonstrates this belief.
The Committee reviewed the composition of the Board and Committees during the year and discussed succession plans for the Chief
Executive. All Board and senior management appointments are viewed through a diversity lens and are based on merit and objective
criteria. Anne Marie Cannon, Independent Non-Executive Director and Chair of the Remuneration Committee, will be stepping down
from the Board at the 2023 AGM having served more than 8 years as a Non-Executive Director. During Q4 2022, the Committee initiated
a formal search process to recruit her successor and we hope to announce an appointment shortly. In order that a new Director is
integrated quickly and efficiently into the Board, and we can benefit from their knowledge and expertise, they will receive a full induction.
Towards the end of the year, review of development plans and succession planning for Executive Directors, the Management
Board, senior leaders (direct reports to the Management Board) and other key operational roles across the Company was formally
scheduled as a standing Board item. Further information can be found on page 63 of the Governance Report.
Diversity and Inclusion
The Committee recognises the strategic importance of a diverse Board. It is our belief, supported by external evidence, that a Board
which is diverse in gender, ethnic and social background correlates with the skills, experience and perspective shared in the boardroom.
OverviewAdditional InfoGovernanceFinancial StatementsStrategic Report 68 STV Annual Report and Accounts 2022
Governance Committee reports
We have met the external target laid out in the FTSE Women Leaders Review (formerly the Hampton-Alexander Review), ensuring
a 33% female Board. In addition. we are fully compliant with the Parker Review’s target to appoint at least one Board member
from an ethnic minority background. Furthermore, the Committee recognises the importance of all forms of diversity and remains
committed to striving for further progress in this space.
The Board, together with management, remains focussed on building a supportive and inclusive culture that ensures equality of
opportunity for all and driving measurable progress. In 2022 the topic was formally scheduled tri-annually as a standing Board
item. Further information can be found on page 63 of the Corporate governance report.
Independence
A formal review of the independence of the five Independent Non-Executive Directors was undertaken by the Committee, which
in each case considered relevant issues, including the number and nature of appointments and noting there were no potential
conflicts of interest identified in 2022, and also their length of service. The individual circumstances were also assessed against
independence criteria, including those set out in the Code. The outcome of the review was that the Committee recommended to
the Board that each Non-Executive Director was considered to be independent in character and judgement. As a consequence,
the Board continued to satisfy the requirement for at least half of the members, excluding the Chairman, to be Non-Executive
Directors whom the Board considers to be independent.
Overboarding
During the year, the Committee kept under review the number of external directorships held by each Director, taking into account
the risks of ‘overboarding’. The Committee considered the limits on the number of directorships imposed by relevant regulations
in addition to the guidelines of shareholder bodies as they relate to the maximum number of Board roles considered acceptable.
Following the Committee’s recommendation, the Board is satisfied that there are no Directors whose time commitment causes
concern and that all Directors have been able to devote sufficient time to the Company.
Re-election to the Board
In accordance with the Code, and recommendation of the Committee to the Board, all the continuing Directors of the Company
will seek re-election at the next AGM and further information in support of their re-election will be set out in the Notice of Meeting.
As previously noted, Anne Marie Cannon will step down from the Board at the 2023 AGM. The Board believes that all Directors
continue to be effective and contribute to the Company’s long-term sustainable success and further details are provided in
Directors’ biographies on page 57 and in the Notice of Meeting.
Report of the Audit & Risk Committee
The members of the Committee, all of whom were independent during the year, were:
Ian Steele (Chair)
Anne Marie Cannon
David Bergg
Simon Miller
Aki Mandhar
The Audit & Risk Committee is chaired by Ian Steele who has relevant financial experience. The Committee members have, through
their other business activities, significant experience in financial and risk management matters. They have been selected with the
aim of providing the wide range of financial and commercial experience necessary to fulfil the Committee’s responsibilities.
At the invitation of the Committee, meetings are attended by the Chairman, Chief Executive, Chief Financial Officer, and senior
members of the Group Finance Team as required. Representatives from both the external and internal auditors also participate
in each meeting and the Committee meets separately with each of senior management and the external and internal auditors
at least once during the year. These separate meetings with the internal and external auditors provide the Committee with the
opportunity for any issues to be raised by, or with, the auditors.
The Committee met three times during 2022 and once since the year end. The Board receives a copy of the minutes of each meeting
and the papers considered by the Committee are available to any Director who is not a member, should they wish to receive them.
The principal activities undertaken by the Committee during 2022 focussed on the four areas of financial reporting, internal
control and risk management, internal audit; and external audit.
Financial reporting
The Committee’s principal responsibility in this area is to review and challenge the judgements and estimates taken by management
in applying the critical accounting policies that underpin the interim and annual financial statements. The Committee is required to
ensure that appropriate rigour has been applied to the Group’s financial statements, including the content of the Interim Financial
Report, the Annual Report and Accounts, related results announcements, and supporting analyst presentations, and therefore that
the critical accounting policies have been applied appropriately and the disclosures presented are transparent and sufficient. Based
on the work of the Committee, a recommendation is also made to the Board in relation to the application of the going concern
principle, and approval of the Group’s financial statements taken as a whole. The Committee has a particular focus on:
• critical accounting policies, disclosure obligations and practices (including any changes during the period) and the Group’s use
and explanation of alternative performance measures (APMs);
• decisions requiring significant judgements, areas of significant estimate, or where there has been discussion with the external auditor;
• the existence of any errors, adjusted or unadjusted, arising from the audit;
• the clarity and compliance of disclosures with accounting standards and relevant reporting requirements;
• assessment of the going concern basis of preparation and review of the process and financial modelling underpinning the
Viability Statement; and
• the processes surrounding compilation of the Annual Report & Accounts, from the perspective of presenting a fair, balanced
and understandable assessment of the Group’s position and prospects.
STV Annual Report and Accounts 2022 69
Formal reports were received from the Chief Financial Officer and the external auditor during the year, summarising the main discussion
points relevant to the interim report (in September 2022) and the Annual Report (in March 2023). The significant risk from a financial
reporting perspective that has been identified by the Committee in prior years and remains so in the current year, is the valuation of
the Group’s defined benefit pension liabilities as they can be materially affected by the assumptions used. The Committee challenged
management on the key assumptions underpinning the valuation, specifically the discount rate, the RPI and CPI inflation rates, and
the mortality assumptions. Given the volatility in inflation and bond yields in particular over the second half of the year, the Committee
also discussed the impact of these market conditions on the year-end accounting valuation. The Committee also sought assurances
from the external auditors that the assumptions made by management fell within PwC’s acceptable ranges, and was satisfied with
all responses received. The Committee was therefore satisfied that the assumptions underpinning the valuation of pension liabilities
was appropriate and that the pension disclosures were transparent and complied with the relevant accounting standard.
Although not considered significant risks, the Committee also received reporting from management on the accounting for deferred
production stock, the impairment review of investments and taxation. The Committee also discussed the accounting and disclosure
requirements associated with the recent agreement with ITV. The Committee reviews the work in these areas given the judgement
involved by management in the underlying assumptions. Having reviewed them, the Committee was content with management’s
treatment across all areas.
Going concern and long-term viability
The Committee reviewed and challenged the appropriateness of adopting the going concern basis of accounting in preparing the
full year financial statements and assessed whether the business was viable in accordance with the requirements of the Code. The
assessment included a review of the principal risks facing the Group, their financial impact, how they were managed, the availability
of finance and covenant compliance together with a discussion as to the appropriate period for assessment. The Group’s viability
statement is on page 41. Following this review, the Committee was satisfied that management had conducted robust viability
and going concern assessments and recommended the approval of the viability and going concern statements to the Board.
Assessment of fair, balanced and understandable reporting
As part of the Committee’s work on assessing whether the Annual Report and Accounts, when taken as a whole, is fair, balanced and
understandable, the Committee received reports from management setting down the process undertaken and factors considered
when making the assessment. The Committee reviewed the process undertaken in the preparation of the Annual Report and Accounts,
and determined that the controls underlying its production were appropriate. The Chief Financial Officer manages the production of the
Annual Report and Accounts, with ownership of each section lying with individuals with recent, relevant experience and knowledge
of the detailed content, supported by external advisors as appropriate. A robust review process of inputs by contributors from across
the business was conducted to ensure disclosures were balanced, accurate and verified, and further comprehensive reviews were
conducted by senior management. The Committee then formally reviewed the draft Annual Report and Accounts.
The Committee also receive reporting from management and review the disclosures on the use of Alternative Performance
Measures (APMs) used in the Annual Report and Accounts to ensure they are transparent and fully explained, as well as clearly
reconciled to the relevant statutory measures. The Committee concluded that the narrative on APMs included in the Finance
Review (on page 31) and in note 27 to the financial statements met this objective.
As a result of their work, the Committee has determined the document to be fair, balanced and understandable and recommended
it to the Board for approval.
Internal control and risk management
The Board has delegated responsibility to the Committee for monitoring and reviewing the Group’s risk management and internal
control framework relating to operating, financial, and compliance internal controls on an ongoing basis and to carry out a review
of their effectiveness. During the year, the Committee reported its findings to the Board.
The internal control framework is designed to facilitate effective and efficient operations, ensure a high quality of internal and
external reporting, and ensure compliance with applicable laws and regulations. This work is supported by reporting from internal
audit on the results of the programme of internal audits completed and the overall assessment of the internal control environment
and any reporting, either verbal or written, from senior management covering any investigations or suspected fraudulent activities.
Such a system can only provide reasonable, and not absolute assurance against material misstatement or loss, acknowledging
that no system can eliminate the risk of failure to achieve the Group’s strategic priorities entirely.
During the year, the following key controls across the Group were in place:
• The Committee supports the Board in assessing the effectiveness of the framework in respect of controls over the financial
reporting process, with its operation delegated to management. The preparation of financial statements and the wider financial
reporting process and control system is monitored by the adoption of an internal control framework to address principal
financial reporting risks. The key financial controls in place across the Group were as follows:
– a comprehensive financial review cycle, which includes a detailed budgeting process where business units prepare budgets
for approval by the Board, monthly reporting of trading results for review and, where necessary, corrective action as well as
detailed and regular re-forecasting
– regular reviews of key performance indicators and business risks with consequent steps to manage any matters arising
– procedures for the approval of capital expenditure
– key financial reporting controls including; balance sheet reconciliations, payment controls, payroll approval controls and third
party specialist advice relating to inputs for critical accounting judgments and estimates and corporation tax disclosures
– general regulatory and other compliance controls including GDPR.
• The Committee conducted a detailed review of the Group’s Risk Appetite Statement and recommended a small number of
updates to the Board for approval, having taken into account the strategic objectives and business model of the Group as well as
the changing environment in which it operates. The Committee also reviewed and approved proposals to refresh and update the
Group’s risk management policy and supported the Board in a robust assessment of emerging risks, as well as principal risks and
how they are being managed or mitigated. Risk management on pages 34 to 40 details how these requirements were addressed.
OverviewAdditional InfoGovernanceFinancial StatementsStrategic Report 70 STV Annual Report and Accounts 2022
Governance Committee reports
• The Board reviewed the progress with embedding the Group’s TCFD framework, with a particular focus on the impact of
climate-related risks on the Group.
• The Corporate governance report on pages 60 and 61 provides details of a clearly defined management structure and delegation
of authority to Committees of the Board, subsidiary boards and divisional board.
• The Non-financial information statement on page 46 provides details of the internal operating controls.
• There were also high recruitment standards and formal career development and training to ensure the integrity and competence
of staff and controls around the engagement of freelancers and other contract staff.
• The Group promotes a culture of openness with its employees and where there are concerns, encourages them to utilise various
means available to speak up. The Group recognises that employees may not feel comfortable reporting their concerns through
an internal channel and therefore provides access to an external whistleblowing process. A formal whistleblowing policy is in
place. All matters raised are investigated and reported to the Committee. No matters were raised during 2022.
Internal audit
The Group’s internal auditor is KPMG. The primary focus of the internal audit programme is to, on a rotational basis, provide assurance
over key revenue streams and operating costs, as well as over the Group’s enterprise risk management frameworks and mitigating
controls in place to manage emerging and existing principal risks. The internal auditor’s work is designed to provide insights into
the internal control environment and assess the operating efficiency of key processes and controls, as well as providing broader
feedback on the application of the Group Risk Management Policy and related processes.
During the year, KPMG provided regular reporting to the Committee that included: (i) status updates on the performance of
audits against the internal audit plan (for Q4 2021 and FY2022); (ii) detailed reports on internal audits completed during the year,
including findings and recommendations for improvement; and (iii) a proposed audit plan for FY2023. In addition, the internal
audit partner shared insight and updates on the status of broader activities underway in relation to corporate governance reform,
and the anticipated timelines for proposed changes both in law and by the FRC via changes to the Code.
Internal audits completed during the year and to the date of this report, were on General IT Computer Controls, Cyber Security,
Environment, Social and Governance (ESG) and Internal Controls over Financial Reporting (walkthroughs and preparation of Risk and
Control Matrices). For each audit, a detailed report was provided to the Committee that summarised the scope of the audit, areas of
good practice that had been identified, and any findings and recommended remediation activities. These reports are designed to give
the Committee a detailed insight into the work of internal audit, the outcomes and therefore the strength and operating effectiveness
of the Group’s risk management activities and internal controls. In turn, this work provides an independent, critical component of the
broader assurance sought by the Committee when reporting to the Board its determination of the assessment of the effectiveness of
the Group’s risk management and control frameworks. These reports also allow the Committee to monitor the role and effectiveness
of the internal audit function whilst ensuring it is sufficiently resourced and skilled to provide the assurance required.
Each report was discussed in detail between the Committee, internal auditor and management and, in relation to those audits
listed above, it was agreed that no high priority findings had been identified although there were a number of actions proposed that
would be implemented by management with a view to enhancing existing processes. At each Committee meeting, management
tables a report that tracks each internal audit finding and related recommended mitigating actions to provide the Committee with
comfort that responses are being addressed adequately and in a timely manner. The internal audit team will also track and test
completion of findings on an on-going basis from FY2023 onwards.
The Committee approved the internal audit plan for FY2023 at its meeting in November 2022. The audits confirmed for completion
in 2023 are Compliance (GDPR), Internal Financial Controls (Test of Design), Advertising Revenue Recognition and Management of
VAT Processes. In addition, the internal audit team will revisit their work done in relation to the Group’s Enterprise Risk Management
framework in Q4 2021 to assess progress made against recommendations identified.
Based on the work of the Committee and reports received from management and internal audit, it is recommended to the Board
that the Group’s risk management and internal controls processes were operating effectively throughout the year.
External audit
The Committee oversees the relationship with the external auditor and is responsible for assessing its effectiveness, approving
its terms of engagement, setting audit fees and monitoring the auditors’ independence and objectivity.
The audit partner and senior manager attend all Committee meetings to ensure full communication of matters relating to the
external audit.
During the year, the Committee approved the annual external audit plan and received updates on the progress of the audit.
The Committee reviewed: the external auditor engagement letter and agreed the auditors’ remuneration (the Committee was
authorised by shareholders at the 2022 AGM to agree the remuneration of the external auditors); the findings of the external audit
including key judgements and the level of challenge provided by the external auditor; and management’s responses to control
findings, non-compliance and any other findings identified by the external auditor. In addition, the Committee provided input to
an oversight of the process for the selection of a new Group external auditor for the financial year beginning on 1 January 2023.
The external auditor has confirmed to the Committee that in relation to their services to the Company they comply with UK
regulatory and professional requirements, including Ethical Standards issued by the Auditing Practices Board and that their
independence and objectivity is not compromised.
External auditor effectiveness
As part of its responsibility for assessing the effectiveness of the external audit process and the external auditors’ performance, the
Committee sought feedback from its members, the Chief Financial Officer as well as STV’s finance team and the wider management
team, to the extent they were involved in the process. This feedback covers various aspects of the external audit process, including the
audit team; how the audit is both planned and executed; the role of management; and communication. Comments are considered by
the Committee and relayed to the auditors and to management. Following completion of this assessment for the 2022 year end, the
Committee concluded that it was satisfied with the external auditors’ performance and the effectiveness of the external audit process.
STV Annual Report and Accounts 2022 71
Independence policy and non-audit fees
Both the Board and the external auditor have safeguards in place to protect the independence and objectivity of the external auditor,
which are detailed in the External Auditor Independence Policy. The Committee is responsible for approving, in advance, any non-audit
work undertaken by the external auditor. Under that policy, the Chief Financial Officer must obtain the approval of either the Chair of
the Committee or another Committee member if the preference is to use the auditor and must provide an explanation as to why
the auditor is the most suitable supplier of the proposed non-audit services. A case-by-case decision is therefore necessary, and
the auditor cannot be engaged for non-audit work without reference to the Committee. In certain cases, the external auditor may
be selected over another service provider due to their detailed knowledge and understanding of the Group’s operations.
PwC also has an internal process whereby pre-engagement approval of all non-audit services is required to be given by the
Audit Partner.
There is also a policy to regulate the appointment of former audit colleagues to senior finance positions in the Group.
The external auditor is required each year to confirm in writing to the Committee that it has complied with the independence
rules of its profession and regulations governing independence, having taken into consideration matters such as the individual
independence of members of the engagement team and the firm as a whole and the nature of any non-audit work undertaken.
Before PwC takes on any engagement for other services from the Company, careful consideration is given as to whether the project
could conflict with its role as auditor or impair its independence or infringe audit rules. This includes consideration of all safeguards
that are in place to mitigate the risks to independence.
During the year under review, the non-audit work carried out by PwC consisted of the interim review and covenant reporting for
the purpose of compliance with the Group’s bank facility agreement. The fees for these were 12% of the audit fee, and the Committee
was comfortable that PwC was the most suitable supplier for these services.
Statutory Audit Services Compliance
The Committee confirms that the Group has complied during financial year 2022 and to the date of this report with The Statutory
Audit Services for Large Companies Market Investigation (Mandatory Use of Competitive Tender Processes and Audit Committee
Responsibilities) Order 2014, which relates to the frequency and governance for the appointment of the external auditor and the
setting of a policy on the provision of non-audit services.
PwC LLP was appointed external auditor after an initial 10-year term, on 20 June 2013 with mandatory rotation of audit firm
required from 1 January 2023. The senior audit partner who has been on the engagement for the past five years will cease as
senior audit partner for STV concurrent with the change in audit firm as required. To that end, and to enable an orderly transition,
the Committee has provided oversight of the process for the selection of a new external auditor and initiated the tender process
in Q4 2021 through a pre-qualification stage.
Several firms were invited by the Committee, having given proper regard to the complexity of the Group, with the tender process
undertaken by highly capable and experienced audit firms with strong track records, technical expertise and credentials with listed
businesses and in the media sector. The process was open to audit firms including and extending beyond the Big Four, with a shortlist
of three firms successful in the pre-qualification stage. These three short-listed firms included one firm from outside the Big Four.
The Group’s current auditor, PwC, did not participate in the process as they were coming to the end of the maximum 20-year
duration allowed for external audit appointments under the Statutory Auditors and Third Country Auditors Regulations 2016.
November/December 2021
Pre-qualification process to identify
a short-list of candidates
Criteria considered: (i) independence
of audit firm; (ii) credentials of the
firm, proposed audit partner and
senior manager, with specific focus
on public listed companies and sector
experience, and (iii) indicative fee range
Meetings held with Committee
Chair, Chief Financial Officer and
Head of Statutory Reporting
Short list of three firms taken
forward to main tender process
June 2022
Invitation
to tender
(ITT) issued
to short list
Information
pack shared
and
management
meetings
held with
participants
July 2022
Submission
of tender
documents
Presentation
to Tender Panel
comprising the
Committee Chair,
one Committee
member, the
Chief Financial
Officer and Head
of Statutory
Reporting
August 2022
Committee
recommendation
to the Board (in
accordance with
s.489A of the
Companies Act
2006), the approval
of the appointment
of Deloitte LLP as
external auditor,
subject to
shareholder
approval at
the 2023 AGM
2023 AGM
Appointment
will be put to
shareholders
for approval
Audit transition plans
The proposed external auditor, Deloitte, is currently undertaking activity in preparation for the external audit of the Group for the
2023 audit cycle. This will aid a smooth transition and allow Deloitte to embark on the 2023 audit as well prepared as possible.
This activity includes:
• A review of its non-audit services provided to STV and the necessary steps to ensure auditor independence
• Liaising with PwC during the 2022 audit cycle
• Meetings with key members of the STV senior management team at Group and divisional level
Deloitte will complete the review of the half-year results and audit for the full year ending 31 December 2023.
OverviewAdditional InfoGovernanceFinancial StatementsStrategic Report 72 STV Annual Report and Accounts 2022
Remuneration report
Annual Statement
I am pleased to introduce the Directors’ Remuneration Report for 2022.
During 2022, we operated under the Remuneration Policy approved by shareholders at the 2021 AGM. The Remuneration
Committee remains satisfied that the current executive remuneration framework is aligned with delivery of the Company’s
strategy and the creation of long-term shareholder value. We will continue to closely monitor developments in shareholder
guidance to ensure that our approach meets shareholders’ expectations.
Overview of 2022 performance
Continued strategic progress and record adjusted operating profits were the hallmarks of 2022, despite the challenging trading
environment that arose as the grip of macroeconomic changes took hold leading to increased uncertainty that impacted the
advertising revenue market.
Transforming the business from a linear broadcaster to a growing streaming and production business is the aim of the diversification
strategy. With nearly 40% of earnings generated by the non-broadcast businesses in 2022, the aim to re-position the earnings base
of the Company and deliver 50% of earnings from these activities by the end of 2023 is firmly on track. This provides solid evidence
of the strong delivery focus of the executives from a starting position of only 19% of earnings from these businesses when this
strategy was introduced.
The strategy to maximise the value of the broadcasting business was achieved as STV maintained its leading market position.
The channel was the most watched in peak time in Scotland for the fourth consecutive year and achieved its highest peak time
audience share since 2009, evidence of the resilience of the Broadcast business. As a result, despite total advertising revenues
reducing year on year, regional advertising revenues (excluding Scottish Government spend) continued to grow, spurred on by the
highly effective STV Growth Fund which is building loyalty and increasing retention levels with an ever-expanding range of SME
advertisers in Scotland.
The digital business delivered record-breaking numbers in 2022, with its highest ever viewing figures, streams and active
users. The successful content strategy which has established a rich catalogue of over 4,000 hours of high-quality Player-exclusive
programmes saw 20 new content deals adding over 150 new titles. In late 2022, a significant new content sharing partnership
with ITV was secured. This will provide STV Player with exclusive rights for over 100 hours of original and premiere content each
year. All of these success factors generated 9% growth in digital VOD advertising revenue year on year.
A record number of 30 new programme commissions were secured by STV Studios, production hours grew by almost 50% to
244, and the business is already on track to double revenue in 2023, such is the strength and quality of the development pipeline:
all further evidence of delivery of the diversification strategy. 2022 was also the most profitable year to date for the business as
it increases in scale with a customer base that includes global streamers and a growing range of networks.
As a Public Service Broadcaster, there is deeply embedded awareness at the core of the business of the importance of the
Company’s responsibility to deliver a positive social impact. This purpose is underpinned by personal objectives defined for the
Executive Directors and Management Board and cascaded across the entire business. Targets relating to STV Zero, the Company’s
sustainability strategy, and the Diversity and Inclusion Strategy have been incorporated into the executive incentive structure and
assigned to the Executive Directors as personal objectives. During 2022, the Board has received regular updates on progress
against delivery of all ESG related activities and performance against targets.
Incentive outcomes for 2022
The annual plan was based on a balanced set of financial targets (operating profit and cash generation), as well as personal
objectives linked to strategic delivery (including ESG-related).
Adjusted Operating Profit of £25.8m was in line with target, reflecting the robust performance of the business in increasingly
challenging markets as the year progressed, as well as the stretch of the underlying targets. Cash generated by operations was
impacted by significant investments in working capital to support the continued strategic growth of STV Studios. As a result, the
cash flow outcome of £11.5m was below the stretching performance range set by the Committee at the start of the financial year.
Both Executive Directors also performed highly effectively against their personal objectives with significant progress towards
fulfilment of the long-term strategic objective to drive profitable growth in the digital business and STV Studios. Increasing levels
of understanding of the Company’s investment proposition was achieved through a targeted engagement programme with the
capital markets. Following settlement of the triennial valuation of the Company’s defined benefits pension schemes in 2021,
activity with scheme trustees focussed on investment strategy planning. Additionally, key ESG targets were met enhancing the
Company’s positive social impact including SBTi approval of the sustainability strategy. The personal objectives element of the
bonus award for Simon Pitts was 88% and 90% for Lindsay Dixon. Full details of the performance against personal objectives
are set out on pages 81 and 82.
This overall performance resulted in an outcome of 47% and 47.5% of maximum for the Chief Executive and Chief Financial Officer
respectively in 2022, which the Committee believes is an appropriate reflection of performance for our stakeholders over the year.
In line with the Remuneration Policy, 20% of bonus awards will be deferred into shares, which will vest after three years. Further
detail on the bonus targets and outcomes is set out on page 80 and 81.
The 2020 Long Term Incentive Plan (LTIP) award vested by reference to performance over the three-year period to 31 December
2022. This award was based on EPS growth, non-broadcast earnings and total shareholder return (TSR) performance.
STV Annual Report and Accounts 2022 73
For EPS, the delivery of annualised growth over the period of 5.8% represented robust growth against stretching targets set in
the context of very challenging market conditions. Non-broadcast earnings in 2022 amounted to £9.9m, representing 38% of the
Group’s earnings in line with our strategic objective to diversify the earnings base of the business. Performance for both of these
elements was within the target range, with vesting at 40.1% of the maximum for the EPS component and 51.3% of the maximum
for non-broadcast earnings. TSR performance fell below the threshold target, resulting in no vesting of that element. Overall, this
translated into a total vesting for the award at 35.4% of the maximum. Further detail on the LTIP targets and outcome is set on
pages 82 and 83.
The Committee reviewed the LTIP outcome against a broader assessment of performance over the period including, in line with
shareholder guidance, considering whether any ‘windfall gain’ had occurred. The Committee concluded that the vesting outcome
was appropriate and reflected the robust performance of the business and the stretching nature of the underlying targets.
Furthermore, as the executives volunteered to defer the grant of this LTIP award during the unprecedented uncertainty and
market volatility during the early stages of the pandemic in 2020, the risk of ‘windfall gains’ arising had passed as markets
settled by the date of grant in December 2020.
This award will vest in December 2023 and then be subject to a two year post-vesting holding period in line with the
Remuneration Policy.
Company-wide remuneration
The Committee has oversight of remuneration and related policies across the organisation and gives due consideration to these
when determining pay for Executive Directors.
During the year, the Company delivered a number of measures to support all colleagues through the challenging economic and
cost-of-living environment. In early 2022, an across-the-board salary increase of 3% was awarded to all colleagues. As disclosed
last year, in recognition of the exceptional effort and contribution from colleagues in delivery of 2021 performance, a one-off
all-employee share award with a face value of £1,000 was awarded, and this vested in full in March 2022. Additionally, colleagues
received a one-off cash bonus of £500 at the close of 2021.
As the cost of living continued to increase during 2022, the Management Board, with approval from the Committee, took the
initiative to make a further cash payment of £500 to approximately two-thirds of colleagues based on the level of their base
salary. Taken together, these awards (cash payments and the share award) delivered total incremental support in a range from
£1,500 (to all colleagues) to £2,000 (to two-thirds of colleagues).
In addition to these supplementary financial measures targeted at those most impacted by the cost-of-living pressures, a wider
array of initiatives was delivered during the year to continue to support the wellbeing of all colleagues with an increased focus
on supporting financial wellbeing.
For 2023, an across-the-board salary increase of £2,000 was awarded to all colleagues, irrespective of the level of seniority or role.
This approach ensures that the increase to our salary budget is focussed primarily on supporting our lowest paid colleagues, with
over two thirds receiving increases of at least 5% with an increase of almost 10% to those on the lowest salaries. For more senior
roles, the percentage increase is significantly lower.
This award was combined with an extensive review of the Company’s salary and grading structure to ensure competitiveness with
the wider market, particularly in the face of a dynamic labour market during 2022 as the post-Covid opening up of the job market
and increased rate of inflation has driven wage inflation. This review process highlighted the significant demand driven pressures
influencing salary levels of roles in areas with skills shortages, including digital and software development, production roles in STV
Studios and STV News and editorial roles in STV News.
Through this review, 20% of colleagues received an increase to base salary in excess of the £2,000 referred to above. Overall,
the average of these additional salary increases, received by one-fifth of colleagues, was 12.8%.
Finally, a new all-employee annual incentive arrangement linked to exceeding key financial targets will be introduced for 2023,
providing all colleagues with the opportunity to participate in the performance we deliver as a business during the year.
Implementation of Policy for 2023
In line with the approach described above for all employees, Executive Directors also received an increase of £2,000 to base salary
with effect from 1 January 2023. This equates to increases of 0.5% and 0.8% for the Chief Executive and Chief Financial Officer,
respectively, significantly below the all-employee average increase of 5.5% (when additional salary increases, received by one fifth
of colleagues, are included). This illustrates the principle of our approach in providing the greatest levels of increase to our lowest
paid colleagues. It also provides further evidence of the Committee’s continued commitment to a restrained and responsible
approach to executive salaries, having increased in line with employees in 2022 (at 3%), with no increases in 2021, and a voluntary
salary reduction in place for 5 months of 2020.
In 2023 the Executive Directors will both receive a pension contribution of 7% of salary, in line with the wider workforce, the
contribution for the Chief Executive having reduced at the end of 2022 (from 20% of salary) consistent with the commitment
made in the Remuneration Policy.
Executive Directors will participate in the annual bonus and LTIP on a similar basis as for 2022. The performance measures
applying to both incentive schemes relate to continued delivery of the strategy and are aligned with shareholders’ interests. The
annual bonus will continue to be based on a combination of operating profit, cash flow and personal objectives, with performance
target ranges built around the Board’s expectations for performance in the year ahead. Personal objectives will continue to relate
to key success factors in progressing strategic delivery including: launching the next phase of the diversification strategy beyond
2023; continuing to increase STV’s positive impact through delivery of key ESG priorities; delivery of efficiency and cost savings
targets; and securing key regulatory aims. Further details of the objectives are set out on page 79.
OverviewAdditional InfoGovernanceFinancial StatementsStrategic Report 74 STV Annual Report and Accounts 2022
Remuneration report
The performance measures for the 2023 LTIP award will remain as EPS, non-broadcast earnings and relative TSR, relating as these do
to delivery of the strategy and the creation of shareholder value. The Committee has set stretching performance target ranges for all
metrics, aligned to the challenging long-term plan agreed by the Board and taking into account external expectations for performance.
For EPS, the target range for performance in the final year of the performance period (FY25) has been set at 37p to 44p, which is
based on the Board’s long-term strategic plan and will be challenging to deliver in the context of the current trading and market
outlook. The target range for non-broadcast earnings (in FY25) has been set at £15.0m to £19.5m, which at full vesting represents
approximately double the earnings derived from these activities in 2022, reflecting the continued commitment to delivering the
long-term diversification strategy. Further details on the targets are set out on page 79.
The fee for the Chairman and the base fee for the Non-Executive Directors will also increase by £2,000, consistent with the
across-the-board approach described above for our employees and Executive Directors.
Shareholder engagement and Remuneration Policy review
We remain dedicated to ongoing engagement with major shareholders and investor bodies on the issue of executive remuneration.
The Committee stays abreast of best practice and shareholder expectations, and we seek to continue to conform to these standards
as they evolve.
With respect to the approval of our Remuneration Policy at the 2021 AGM and the advisory votes on our Annual Report on
Remuneration since then, we have regularly engaged with shareholders and have consistently received strong support from
the vast majority of our register, including most of our major shareholders. The overall voting outcomes we have received at the
AGM (see page 87) have primarily been the result of the impact of one shareholder with a significant holding voting against these
resolutions. We have undertaken further dialogue with this shareholder who is generally supportive of the Company’s overall
approach to executive remuneration, but has a concern around one specific element of our Policy, the use of nil-cost options in the
LTIP. The Committee has carefully considered the issues but, given the strong support from the majority of our shareholders (both
in engagement and in their voting decisions) and in recognition of the clear alignment of our framework to both well-established
shareholder guidance and market practice, we have to date not made any changes to reflect the feedback from this one shareholder.
Our current Remuneration Policy was approved at the 2021 AGM, and therefore the triennial review of our executive remuneration
framework will be undertaken by the Committee during 2023, ahead of seeking shareholder approval for the new Policy at the 2024
AGM. It is the Committee’s intention to undertake a comprehensive review to ensure our framework remains optimally aligned with
our strategy, the creation of shareholder value, and the evolving market and shareholder landscape. We plan to engage with all
our major shareholders during this review, and we look forward to incorporating all views into the development of our proposals.
In conclusion
The Annual Report on Remuneration, including this Annual Statement, will be subject to an advisory vote at our 2023 AGM. I look
forward to your support and would be happy to answer any questions you may have on our executive remuneration arrangements.
As set out on page 55, I will step down from the Board at the 2023 AGM, and therefore this will be my final report as Chair of the
Remuneration Committee. I would like to thank my fellow Committee members and our shareholders for their support during
my tenure.
Anne Marie Cannon
Chair of the Remuneration Committee
7 March 2023
STV Annual Report and Accounts 2022 75
Summary of the Directors’ Remuneration Policy
The Directors’ Remuneration Policy (‘the Policy’), determined by the Company’s Remuneration Committee (‘the Committee’), was
approved by shareholders at the 2021 Annual General Meeting and is available in full on the Company’s website: www.stvplc.tv or
from the Company Secretary. When developing the Policy, the Committee confirmed the key principles it believes should underpin
the remuneration framework. These are:
• Closely align rewards with the delivery of Company strategy;
• Ensure a significant proportion of the awards are based on long-term success criteria;
• Reflect changes in best practice and governance;
• Simplify and streamline the framework for clarity and effectiveness; and
• Ensure market competitiveness.
The section below provides a summary of the key elements of our executive remuneration framework.
Base salary – the Committee sets salaries as a retainer for the Executive Directors to recognise status and responsibility
to deliver the strategy
• Set taking into consideration several factors including the scope and responsibilities of the role, the skills, experience
and performance of the individual, and other external and internal reference points.
• Normally reviewed on an annual basis.
• In general, any salary increase for Executive Directors will be in line with other employees in the Group.
Benefits – to provide competitive levels of employment benefits consistent with the role
• Executives are entitled to receive a taxable cash allowance.
• Paid in lieu of benefits in kind, including car and private medical insurance, currently £25,000 p.a.
• Executive Directors are eligible to participate in the Company’s Save As You Earn plans on the same terms as all employees.
Pension – to provide competitive levels of retirement benefit
• The Group operates a number of different pension arrangements. Executive Directors have the option to receive a taxable cash
allowance in lieu of pension benefits.
• The maximum pension contribution or taxable cash allowance in lieu of pension is set in line with the wider workforce, currently
7% of base salary.
Annual bonus – aligns reward to the delivery of annual financial and strategic performance measures; deferral creates
long-term alignment with shareholders
• Maximum annual opportunity of 150% of salary for the Chief Executive and 125% of salary for the Chief Financial Officer.
• Payment is determined by reference to performance assessed over one financial year based on a range of financial and
strategic measures.
• The Committee has discretion to adjust the formulaic outcome if it considers that this is inconsistent with overall Group
performance, taking into account any factors it considers appropriate.
• A proportion of any bonus (20%) is deferred, and normally vests over three years.
• Recovery provisions apply, including expanded malus and clawback provisions implemented through the 2021 policy review.
Long Term Incentive Plan – aligns reward to the delivery of long-term financial performance delivered for shareholders
• Maximum award in respect of a financial year is normally 100% of salary.
• Vesting is determined by reference to performance assessed over a period of at least three years, based on performance
measures that the Committee consider to be aligned to the delivery of strategy and creation of long-term shareholder value.
• The Committee has discretion to adjust the formulaic outcome if it considers that this is inconsistent with overall Group
performance, taking into account any factors it considers appropriate.
• A post-vesting holding period of two years applies.
• Recovery provisions apply.
Shareholding requirement – to strengthen long term alignment with shareholders
• Executive Directors are required to hold shares equivalent to 150% of their annual salary.
• On leaving the Board, Executive Directors are required to maintain their in-employment shareholding guideline (or their actual
shareholding if lower) for a period of two years.
OverviewAdditional InfoGovernanceFinancial StatementsStrategic Report 76 STV Annual Report and Accounts 2022
Remuneration report
The Committee considers that the current Policy and its implementation appropriately
address the following factors, as set out in the 2018 UK Corporate Governance Code.
Clarity
Simplicity
Risk
Predictability
Proportionality
The Committee is committed to providing open and transparent disclosures with regards
to executive remuneration arrangements. In formulating the Policy, the Committee Chair
wrote to major shareholders outlining the proposed changes and rationale for these.
At each year’s AGM, shareholders have the opportunity to ask any questions they may
have on matters relating to executive remuneration.
Our executive remuneration arrangements, which consist of fixed remuneration, an annual
bonus and LTIP, are simple in nature, aligned to UK market practice, and well-understood
by participants.
The Committee considers that the structure of incentive arrangements does not
encourage inappropriate risk-taking. Annual bonus deferral, the LTIP holding period and
in-employment and post-employment shareholding guidelines ensure that Executive
Directors are exposed to the long-term performance of the Company and are therefore
incentivised to deliver our strategic ambitions within the Company’s risk appetite.
Recovery provisions also apply for both the annual bonus and LTIP.
For each component of pay, the Policy outlines the maximum opportunity levels
for Executive Directors. Actual incentive outcomes vary dependent on the level
of performance achieved against specific measures.
Our remuneration framework does not reward poor performance. Payment of the annual
bonus and LTIP is subject to the achievement of stretching performance targets, which
are determined by the Committee annually to take account of business expectations
and strategic priorities at the time.
Alignment to culture
The metrics used to measure performance under both the annual bonus and LTIP
are closely aligned to the delivery of the Company’s strategy and objectives.
STV Annual Report and Accounts 2022 77
Remuneration at a glance
2022 performance highlights
Continued
transformation
into a profitable
streaming and
production
business with 38%
of earnings from
non-broadcast
activities
Delivery of record
adjusted operating
profit despite
challenging
macroeconomic
environment
during 2022
Resilient Broadcast
business maintains
STV’s market
leading position in
Scotland as peak
time share reaches
highest level in
over a decade
Record number
of programme
commissions won
by STV Studios,
double 2021 levels
40% of STV Player
streams for unique
STV Player content
and new content
deal delivering
100+ hours of UK
original content
from 2023
Key ESG targets
achieved
progressing STV
Zero to improve
sustainability and
reduce carbon
impact and
increase diversity
and representation
Summary of remuneration outcome for 2022
Single total figure of remuneration
S Pitts
L Dixon
Fixed pay
Annual bonus
LTIP
£0k
£100k
£200k
£300k
£400k
£500k
£600k
£700k
£800k
£900k
£1,000k
Incentive outcomes – Annual bonus
Incentive outcomes – Long-term incentive plan
S Pitts
L Dixon
25%
0%
22%
53%
Operating profit
Cash flow
Personal objectives
Not achieved
Operating profit
25%
0%
Cash flow
22.5% Personal objectives
52.5% Not achieved
Overall outcome –
47% of maximum
Overall outcome –
47.5% of maximum
Shareholding requirements
S Pitts
L Dixon
Shareholding guideline: 150% of salary
20.0% EPS
15.4% Non-broadcast earnings
0%
Relative TSR
64.6% Unvested
Overall outcome –
35.4% of maximum
Current shareholding:
105% of salary
Current shareholding:
10% of salary
Simon Pitts and Lindsay Dixon have a right to receive shares in respect of the deferred portion of previous annual
bonuses and, as stated in the table on page 84, both hold unvested LTIP awards which are in excess of the
shareholding guidance of 150% of salary.
All-employee reward
All employee share
award with a face
value of £1,000
(at grant) vested
in full during 2022
Over two thirds of
employees receiving
a 2023 salary increase
of at least 5%
One fifth of colleagues
receiving additional
increase to 2023
salary with average
award of 12.8%
Additional cost-of-living
support including
one-off cash payment
New all-colleague cash
bonus plan for 2023 to
ensure all colleagues
share in our success
OverviewAdditional InfoGovernanceFinancial StatementsStrategic Report
78 STV Annual Report and Accounts 2022
Remuneration report
Summary of how our Policy will be implemented in 2023
Pay element
Approach
Fixed pay
Base salary
Fixed pay levels set at competitive
levels with role-appropriate benefits
arrangements.
Pension
Benefits
allowance
Implementation in 2023
Simon Pitts,
Chief Executive
£433,797
Lindsay Dixon,
Chief Financial Officer
£244,426
Increase of £2,000 in line with
approach for wider workforce
Increase of £2,000 in line with
approach for wider workforce
7% of salary*
£25,000
7% of salary
£25,000**
Pay linked to
performance
Annual bonus
Incentive linked to shorter-term targets,
including business performance and
growth, and ESG measures. 20% of
award is deferred in shares.
Maximum opportunity –
150% of salary
Maximum opportunity –
125% of salary
Subject to operating profit, cash flow and personal targets
LTIP
Incentive linked to long-term priorities.
Maximum opportunity – 100% of salary
Subject to EPS, non-broadcast operating profit
and relative TSR targets
Shareholding requirements
To align the interests of executives
with shareholders.
150% of salary, to be maintained for two years
post-cessation of employment
* Reduced from 20% of salary at end of 2022 in line with Remuneration Policy.
** Increased from £18,000 per annum to £25,000 per annum with effect from 1 July 2022.
How we measure performance and link to strategy
Performance measure
Bonus
LTIP
Rationale and link to strategy
Operating profit
Cash flow
EPS
Non-broadcast operating profit
Personal objectives
Relative TSR
Measures profitability of our operating activity
Measures operational gearing
Measures earnings performance driven by continued operational excellence
Aligns to strategic objective to diversify earnings
Focuses executives on the delivery of strategic goals linked to key business priorities,
including ESG targets
Measures the delivery of long-term sustainable value growth for shareholders
STV Annual Report and Accounts 2022 79
Annual Report on Remuneration
This section of the report sets out how the Policy will be implemented in 2023 and how it was implemented during 2022.
Some sections of this report, where indicated, have been audited.
Statement of implementation for 2023
Executive Directors
Salaries
As described in the Remuneration Committee Chairman’s introductory statement, for 2023 an across-the-board salary increase of
£2,000 per employee, irrespective of level of seniority, was implemented. This approach ensures that salary increases are focussed
primarily on supporting the lowest paid colleagues, with over two thirds of employees receiving increases of over 5%. In line with this
approach, Executive Directors also received an increase of £2,000 with effect from 1 January 2023, which translates to increases of
0.5% and 0.8% for the Chief Executive and Chief Financial Officer, respectively, significantly below the all-colleague average increase
of 5.5% when additional salary increases, received by one fifth of colleagues, are included. Salaries for 2023 are therefore as follows:
Executive Director
2023 salary (£)
2022 salary (£)
Increase (£)
Increase (%)
S Pitts
L Dixon
433,797
244,426
431,797
242,426
2,000
2,000
0.5%
0.8%
Benefits and pension
In line with the Policy, the Executive Directors will receive a taxable cash allowance in lieu of benefits-in-kind of £25,000.
Pension contributions will operate in line with the Remuneration Policy. For 2023, contribution levels (or cash allowances) for
Executive Directors will be aligned to the wider workforce rate of 7% of salary. For the Chief Executive, this represents a reduction
from 20% of salary at the end of 2022 in line with the commitment in the Policy.
Annual bonus
The annual bonus will operate in line with the Policy. The maximum bonus opportunity is 150% of salary for the Chief Executive
and 125% of salary for the Chief Financial Officer.
For 2023, the bonus will be based on stretching targets set for the performance measures in the table below.
Performance measure
Weighting (% of max)
Adjusted operating profit
Cash flow*
Personal objectives
* Cash generated by operations.
50%
25%
25%
Personal objectives for 2023 will relate to key success factors in progressing and delivering the strategy and long-term plan, including:
• Achievement of the diversification strategy milestone target of 50% of earnings from outside linear television;
• Successful launch of the next phase of the growth strategy and targets beyond 2023;
• Delivery of efficiency and cost saving targets in 2023 to maintain financial flexibility and resilience to enable continued
momentum in delivery of strategic priorities;
• Securing long-term extension of the Company’s two Public Service Broadcast licences;
• Continued growth of the Company’s positive impact through delivery of key ESG objectives, including diversity targets set
for 2023 and next phase of STV Zero sustainability strategy.
The Committee believes that the annual bonus performance targets are commercially sensitive, and that it would be detrimental
to the interests of the Company and its shareholders to disclose them fully at this time. It is the Committee’s intention to disclose
the targets, and performance against them, in the next Annual Report on Remuneration if the Committee is satisfied that the
targets are no longer sensitive.
In line with the Policy, 20% of any bonus received will be deferred in shares for a period of three years.
Long-term Incentive Plan
In 2023, the Executive Directors will receive awards under the LTIP at the level of 100% of salary. Awards will vest after three
years and will be subject to a two-year holding period post-vesting. The performance targets for the award are as follows:
Performance
measure
Calibration of targets
EPS
Adjusted EPS in FY25
Non-broadcast
operating profit
Adjusted operating profit for non-broadcast activities
in FY25
Relative TSR
Ranked position of the Company’s total shareholder
return (‘TSR’) against the constituents of the FTSE
Small Cap Index (using 3 month averaging)
Weighting
Threshold vesting
(25% of maximum)*
Maximum vesting
(100% of maximum)*
50%
30%
20%
37p
£15.0m
44p
£19.5m
Median
Upper quartile
* There is no vesting for performance below threshold, and straight-line vesting between threshold and maximum.
OverviewAdditional InfoGovernanceFinancial StatementsStrategic Report 80 STV Annual Report and Accounts 2022
Remuneration report
The Committee has set stretching performance target ranges for all metrics, aligned to the challenging long-term plan agreed by the
Board and taking into account external expectations for performance. For EPS, the target range is based on the Board’s long-term
strategic plan and will be challenging to deliver in the context of the current trading and market outlook. For non-broadcast earnings,
full vesting would continue to require approximately double the earnings derived from these activities in 2022, reflecting the
continued commitment to delivering a successful diversification strategy.
Non-Executive Directors
The fees paid to Non-Executive Directors are a matter for the Chairman and Chief Executive, and in the case of the Chairman’s fee,
decided by the Senior Independent Director and Chief Executive.
In line with the approach being taken across the Company, including for the Executive Directors, it was agreed to increase the
base fee by £2,000, with effect from 1 January 2023. The fees for additional Board or Committee duties remain unchanged.
Non-Executive Director
Chairman fee
Basic Non-Executive Director fee
Additional fees: Senior Independent Director
Additional fees: Chair of the Audit & Risk and Remuneration Committees
2023 fees (£)
2022 fees (£)
Increase (£)
Increase (%)
152,000
150,000
46,000
13,100
7,500
44,000
13,100
7,500
2,000
2,000
0
0
1.3%
4.5%
0%
0%
Single total figure of remuneration
Executive Directors (audited)
The table below sets out the single total figure of remuneration for the Executive Directors for the 2022 and 2021 financial years.
Executive Director
S Pitts
L Dixon
2022
2021
2022
2021
Salary
£000
Taxable
benefits
£000
Pension
£000
432
419
242
235
25
25
22
18
86
84
14
12
Total
fixed
£000
543
528
278
265
Annual
bonus
£000
Long-term
incentives
£000
Total
variable
£000
304
605
144
287
136
204
77
112
440
809
221
402
Total
£000
983
1,337
499
664
Notes to the single figure table
Taxable Benefits – represents a taxable cash allowance in lieu of benefits-in-kind, as set out in the Remuneration Policy.
Pension – Simon Pitts receives a taxable cash allowance in lieu of pension and life assurance. For 2022, this was set at 20% of salary
but was reduced to 7% following the end of 2022. Lindsay Dixon is a member of the Company’s defined contribution scheme.
The scheme has an employer contribution of 7% of salary up to the pension cap £170,400.
Annual Bonus – This includes the value of bonus earned in respect of the relevant financial year. 20% of the annual bonus will be
deferred for three years and paid in shares.
Long-term Incentives – The 2022 row represents the value of the 2020 LTIP award which is due to vest in December 2023 based on
performance over the three-year period to 31 December 2022. As described on page 82, performance targets have been met in part,
resulting in a vesting outcome of 35.4% of maximum. For the purposes of the table above, the award has been valued based on the
average share price during the three-month period to 31 December 2022 of 261.8 pence. The 2020 LTIP awards were originally
granted based on a share price of 285 pence and therefore, of the vested amount, none relates to share price appreciation over the
performance period. The 2021 row represents a value for the 2019 LTIP award which vested on 29 May 2022 based on performance
over the three-year period to 31 December 2021. The value has been restated from that shown last year based on the share price
on the date of vesting of 300 pence. No dividend equivalents are receivable on the vested shares for either of these awards.
Annual bonus (audited)
The maximum annual bonus opportunity for 2022 was 150% of salary and 125% of salary for the Chief Executive and Chief
Financial Officer respectively. The bonus was based predominantly on financial performance (50% Operating Profit and 25%
Cash Flow), with the remaining 25% based on stretching personal targets linked to strategic delivery. The performance targets
for the 2022 bonus were set by the Committee at the start of the year, and by reference to the annual budget, which itself is set
in the context of the Board’s long-term strategy. The target ranges are set to be appropriately stretching by requiring significant
outperformance of expectations for maximum pay-out, whilst at the same time being considered feasible in the context of the
budget and strategic plan.
Adjusted Operating Profit of £25.8m was in line with target, reflecting the robust performance of the business in very challenging
markets. As described on page 32, cash generated by operations was impacted by significant investments in working capital to
support the continued growth of STV Studios. As a result, the cash flow outcome of £11.5m was below the bottom end of the
stretching performance range set by the Committee at the start of the financial year. Payment for achievement of personal
objectives is close to maximum levels as exceptional progress against key longer-term strategic targets was delivered by both
Executive Directors.
STV Annual Report and Accounts 2022 81
The (unaudited) table below sets out the targets and performance achieved against these for the year ended 31 December 2022.
For the 2022 bonus, 20% will be deferred for three years and paid in shares for both executives.
Performance condition
Weighting
Operating profit*
Cash flow**
Personal objectives
Total (% max)
Total (£)
* Adjusted operating profit.
** Cash generated by operations.
50%
25%
25%
100%
Performance targets
Actual performance
Threshold
(10% of max)
Target
(50% of max)
Maximum
(100%)
(% of max)
(£m)
S Pitts
L Dixon
£23.2m
£24.2m
£25.8m
£28.4m
£25.8m
£26.9m
£29.6m
£11.5m
50%
0%
See below
–
88%
47%
£304k
90%
47.5%
£144k
A full assessment of performance against personal objectives is set out below for both Simon Pitts and Lindsay Dixon.
Simon Pitts, Chief Executive
Investment proposition
• Delivered successful capital market engagement programme building positive sentiment and increased
Promote and increase
support for STV’s
investment proposition
understanding of strategic priorities and growth potential.
• Shareholder base continuing to diversify as clearly understood investment proposition attracts new investors
while majority of larger shareholders have maintained or increased holdings.
ESG
• Achievement of STV Zero targets for 2022 including external validation of strategy by SBTi; Project albert
Grow STV’s positive
impact through delivery
of our ESG priorities
certification on all programmes produced by STV News, including Scotland Tonight, and on 79% of UK-produced
programming by STV Studios; reduction of business travel by 50%; key milestones in long-term strategy to
achieve a sustainable supply chain achieved including first submission to the Carbon Disclosure Project and
sustainability governance structure successfully embedded.
• Continued progress against all D&I targets set for end of 2023 (our people and on-screen).
• Achievement of on-screen gender targets and significant progress in improving on screen ethnic diversity
during 2022.
STV Studios
• Record number of new programme commissions (30) secured with increased range of networks and global
Continue to build STV
Studios’ scale and
reputation
streamers, including four drama commissions setting a new record for scripted content, including a commission
for global streamer, Apple TV+ and a returning series for Channel 4.
• Target for returning series exceeded with 11 returning series currently.
• Growth across entire portfolio of labels with extension to exclusive partnership with TOD Productions and
addition of ninth creative label, Mighty Productions.
• Secured revenue for 2023 of £50-55m is already materially ahead of £40m target.
Digital
• Total STV Player consumption up 6% year on year with growth against all key metrics.
Drive STV Player growth
through improved
content, marketing
and user experience
• Successful content strategy continuing to expand STV Player’s exclusive catalogue with 20 new content deals
secured. Player-exclusive content accounted for 39% of all streams.
• New long-term content sharing partnership with ITV secured exclusive rights to c.100 hours of original and
premiere content each year.
Broadcast
• Maintained market leading position in Scotland reaching 3 million adults/month ahead of all commercial rivals.
Maximise the value of
Broadcast business and
secure viable future for
STV as a Public Service
Broadcaster
• STV’s peak time share of 22.5% is the highest since 2009.
• Continued outperformance against the Network by 1.9 share points in peak time and 2.3 share points in all time.
• Long-term renewal of STV’s PSB licences recommended by Ofcom.
Based on the above assessment of performance, the Committee determined for the personal element an award of 88% of maximum
for Simon Pitts.
OverviewAdditional InfoGovernanceFinancial StatementsStrategic Report 82 STV Annual Report and Accounts 2022
Remuneration report
Lindsay Dixon, Chief Financial Officer
Investment proposition
• Shareholder base continuing to broaden with key target investors entering register.
Support CEO to increase
support for STV’s
investment proposition
ESG
Grow STV’s positive
impact through delivery
of our ESG priorities
Corporate governance
and risk management
Ensure compliance with
evolving corporate
governance and
audit reforms
Defined benefit
pension schemes
Continued active
management between
triennial valuation cycles
• Programme of targeted capital markets activities successfully delivered and improving market understanding
of strength of investor proposition.
• Achievement of STV Zero targets for 2022, including Project albert certification on all programmes produced by
STV News and on 79% of UK produced programming by STV Studios and external validation of strategy by SBTi.
• Led governance of sustainability to maintain compliance with current/identify future corporate reporting
obligations.
• Continued progress against all D&I targets set for end of 2023 (our people and on-screen) and achievement
of on-screen gender targets and significant progress in improving on screen ethnic diversity during 2022.
• New enterprise risk management framework fully implemented, including Group Risk Management Policy,
updated Risk Appetite Statement, new Risk Impact framework, new Risk Register template, and approved
by internal audit.
• Readiness programme on-track in anticipation of changes to laws and regulations as a result of the corporate
governance and audit reforms, specifically in relation to internal controls over financial reporting.
• Following settlement of triennial valuation, continued positive engagement with trustees on deficit recovery
journey plan and agreement of long-term funding target.
Based on the above assessment of performance, the Committee determined for the personal element an award of 90% of maximum
for Lindsay Dixon.
Consideration of formulaic outcomes
The Committee considered the formulaic outcomes of the annual bonus assessment in the context of the current external
environment, wider Company and individual performance, the shareholder experience, and the treatment of employees
throughout the rest of the Group. In view of the Group’s strong financial performance and continued positive progress in delivering
the strategic plan, with continued profitable digital growth and a record number of commissions secured by STV Studios, both of
which accelerated the diversification strategy with nearly 40% of earnings generated by non-broadcast activities, the Committee
concluded that the formulaic outcomes of the annual bonus assessment were justified, and no discretion was applied.
Long-term Incentive Plan (audited)
The table below sets out the performance achieved for the 2020 LTIP award, which was subject to performance over the three-year
period from 1 January 2020 to 31 December 2022.
Performance condition
Weighting
Threshold vesting
(25% of maximum)
Maximum vesting
(100% of maximum)
Actual
outcome
Percentage vesting
(% of maximum)
EPS
Non-broadcast operating profit
Relative TSR
50%
30%
20%
100%
5%
£8.5m
Median
9%
£12.5m
5.8%
£9.9m
Upper quartile
Below median
Overall vesting
20.0%
15.4%
0%
35.4%
The Committee reviewed this outcome against a broader assessment of performance over the period including, in line with
shareholder guidance, considering whether any ‘windfall gain’ had occurred. The Committee concluded that the outcome was
appropriate and reflected the stretching nature of the underlying targets, and therefore these awards will vest at 35.4% of
maximum in December 2023. Shares vesting will then be subject to an additional two-year holding period.
Scheme interests awarded in the 2022 financial year (audited)
The table below shows awards made to the Executive Directors during 2022 under the LTIP.
Executive
Director
Award type
Date of grant
Basis of award
Number of
shares awarded*
Face value
of award
Threshold vesting
Performance period
S Pitts
L Dixon
LTIP
LTIP
11/03/22
100% of salary
134,937
£432k
25% of maximum
01/01/22-31/12/24
11/03/22
100% of salary
75,758
£242k
25% of maximum
01/01/22-31/12/24
* Calculated using the closing share price of 320 pence on the date prior to the date of award.
These awards will vest after three years, subject to the performance targets set out in the table below. An additional two-year
holding period will apply to any shares vesting.
STV Annual Report and Accounts 2022 83
Performance measure
Calibration of targets
EPS
Non-broadcast operating profit
Relative TSR
Annualised growth in adjusted EPS from
FY21 to FY24
Operating profit for non-broadcast
activities in FY24
Ranked position of the Company’s total
shareholder return (‘TSR’) against the
constituents of the FTSE Small Cap index
(using 3 month averaging)
Weighting
Threshold vesting
(25% of maximum)*
Maximum vesting
(100% of maximum)*
50%
30%
20%
4%
10%
£15.0m
£19.5m
Median
Upper quartile
* There is no vesting for performance below threshold, and straight-line vesting between threshold and maximum.
Payments for loss of office (audited)
No payments for loss of office were made during the year, or the prior year.
Payments to past Directors (audited)
No payments were made to past Directors during the year or the prior year.
External appointments
Neither of the Executive Directors held any external appointments during the year.
Non-Executive Directors (audited)
The table below sets out the single total figure of remuneration for each Non-Executive Director. Non-Executive Directors
do not participate in any of the Company’s incentive arrangements, nor do they receive any benefits.
Non-Executive Director
Financial year
Basic fees
£
Additional fees
£
Total fees
£
P Reynolds*
S Miller
A M Cannon
I Steele
D Bergg
A Mandhar***
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
150,000
137,500
44,000
40,100
44,000
40,100
44,000
40,100
44,000
40,100
44,000
36,700
–
–
13,100
13,400
7,500
5,200
7,500
5,200
–
–
–
–
150,000
137,500
57,100
53,500
51,500
45,300
51,500
45,300
44,000
40,100
44,000
36,700
* Appointed as Non-Executive Director and Chair Elect on 1 February 2021. Assumed position of Chair on 29 April 2021.
** Appointed as Non-Executive Director on 1 February 2021.
Statement of Directors’ shareholding and share interests at 31 December 2022 (audited)
Under the Remuneration Policy, Executive Directors are required to build up a shareholding equal to 150% of salary.
Executive Directors will also, on leaving the Board, be required to maintain this in-employment shareholding guideline
(or their actual shareholding if lower) for a period of two years.
The shareholding requirement for Non-Executive Directors is set at the level of 20,000 shares for the Chairman and 5,000
shares for other Non-Executive Directors.
OverviewAdditional InfoGovernanceFinancial StatementsStrategic Report 84 STV Annual Report and Accounts 2022
Remuneration report
Director
S Pitts
L Dixon
P Reynolds
S Miller
A M Cannon
I Steele
D Bergg
A Mandhar
Number of
beneficially owned
shares at 31/12/22*
Number of unvested
deferred awards**
Number of unvested
LTIP awards at
31/12/22
Current
shareholding
(% salary)
Shareholding
requirements
Requirement
met at
31/12/22
164,689
8,785
25,000
7,577
11,167
9,698
12,489
2,627
94,666
49,439
409,068
229,665
105%
150% of salary
10%
150% of salary
n/a***
n/a***
n/a
n/a
n/a
n/a
n/a
n/a
20,000 shares
5,000 shares
5,000 shares
5,000 shares
5,000 shares
5,000 shares
Y
Y
Y
Y
Y
N****
*
**
***
Beneficial interests include shares held directly or indirectly by connected persons.
For both Executive Directors this relates to the deferred portion of their 2019 and 2021 annual bonus plans. Additionally, as noted above,
both hold unvested LTIP awards which are in excess of the shareholding guidance of 150% of salary.
The shareholding requirement is on track to be met by Simon Pitts and Lindsay Dixon in the near future as vested awards with holding periods
and deferred awards are released. The Committee is confident that both executives retain a strong interest in the Group.
**** At the date of preparation of the Directors’ Remuneration Report, Aki Mandhar holds 6,381 shares following the purchase of 3,754 shares in
January 2023.
The following table provides further detail on the share awards held by the Executive Directors.
Executive
Award
Granted
Held at
31/12/21
Granted
in year
Released
in year
Lapsed
in year
Held at
31/12/22
Vesting dates*
S Pitts
L Dixon
2019 LTIP
2020 LTIP
2021 LTIP
2022 LTIP
2021 DBP
2019 LTIP
2020 LTIP
2021 LTIP
2022 LTIP
2021 DBP
29/05/19
113,223
16/12/20
147,095
24/03/21
127,036
–
–
–
11/03/21
11/03/22
–
–
134,937
37,828
29/05/19
63,567
16/12/20
82,584
24/03/21
71,323
–
–
–
11/03/22
11/03/22
–
–
75,758
17,928
–
–
–
–
–
–
–
–
56,386**
56,837**
–
–
–
147,095
127,036
134,937
37,828
31,657**
31,910**
–
–
–
82,584
71,323
75,758
17,928
29/05/22
16/12/23
24/03/24
11/03/25
29/05/22
16/12/23
24/03/24
11/03/25
* LTIP awards are subject to an additional two-year holding period following vesting.
** As disclosed in last year’s report, the 2019 LTIP vested at 50.2% of the maximum based on performance over the three year period
to 31 December 2021. Vested nil-cost options can be exercised for a period of up to ten years from the date of grant.
Dilution
The following table sets out the current level of dilution against the limits in the bonus and long-term incentive plan and sets out
the commitments to issue shares made during the financial year reported:
Maximum
Current dilution
Additional dilution during the year in question
10% dilution in ten years
5% dilution in ten years
6.68
0.88
(0.39)
(0.47)
STV Annual Report and Accounts 2022 85
Performance graph and table
The graph below shows the Company’s performance, measured by total shareholder return (‘TSR’), compared with the
performance of the FTSE Small Cap and FTSE All Share Media indices. The FTSE Small Cap index is used as a performance measure
under the LTIP, and the FTSE All Share Media index provides a comparison of performance against companies in the media sector.
The chart illustrates the performance of a hypothetical investment of £100 in ordinary shares of STV Group plc over the ten-year
period 1 January 2013 to 31 December 2022, compared to a similar investment in the FTSE Small Cap or FTSE All Share Media
indices. TSR data is based on Returns Index data, calculated on a daily share price growth plus re-invested dividends (as measured
at the ex-dividend rates).
£600
£500
£400
£300
£200
£100
£0
Dec
2012
Dec
2013
Dec
2014
Dec
2015
Dec
2016
Dec
2017
Dec
2018
Dec
2019
Dec
2020
Dec
2021
Dec
2022
STV Group
FTSE Small Cap
FTSE All Share Media
Single figure of total remuneration
The information in the table below shows the total remuneration for the Chief Executive over the same period.
Chief Executive
Single figure of total
remuneration
(£000)
Bonus pay-out
(% maximum
opportunity)
Long-term
incentive vesting
(% maximum
opportunity)
S Pitts
S Pitts
S Pitts
S Pitts
S Pitts
R Woodward
R Woodward
R Woodward
R Woodward
R Woodward
983
1,337
467
1,050
1,712*
697
807
2,269
661
601
47
96
–
87
72
32
29
49
46
54
35
50
–
18
–
14
–
100
–
–
Year
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
* Simon Pitts’ single figure for 2018 includes an amount of £857,000 in respect of his buy-out package paid to compensate
for forfeited remuneration from his previous employer. His single figure excluding this amount would have been £855,000.
OverviewAdditional InfoGovernanceFinancial StatementsStrategic Report 86 STV Annual Report and Accounts 2022
Remuneration report
Percentage change in remuneration
The table below shows the percentage change in the salary/fees, benefits and annual bonus of all Directors of the Company
compared to all employees from 2019 to 2020, 2020 to 2021, and 2021 to 2022.
All employees
S Pitts
L Dixon
P Reynolds****
S Miller
A M Cannon
I Steele
D Bergg
A Mandhar****
Salary/fees**
Taxable benefits*
Annual bonus*
2022
3%
3%
3%
0%
7%
14%
14%
10%
10%
2021
0%
15%**
15%**
n/a
15%
15%
15%
15%
n/a
2020
2%
(9)%
(9)%
n/a
(9)%
(9)%
(9)%
(9)%
n/a
2022
n/a*
0%
39%
n/a
n/a
n/a
n/a
n/a
n/a
2021
n/a*
62%
16%
n/a
n/a
n/a
n/a
n/a
n/a
2020
n/a*
0%
0%
n/a
n/a
n/a
n/a
n/a
n/a
2022
n/a*
(50)%
(50)%
n/a
n/a
n/a
n/a
n/a
n/a
2021
n/a*
n/a***
n/a***
n/a
n/a
n/a
n/a
n/a
n/a
2020
n/a*
(100)%
(100)%
n/a
n/a
n/a
n/a
n/a
n/a
*
**
***
These benefits are not available to all employees.
All Executive and Non-Executive Directors volunteered a 25% cut in base salary/fees from 1 April to 31 August 2020, in response to Covid-19,
and so the increase in salary/fees in 2021 reflects reinstatement to full pay and is not a real increase.
Following suspension of the annual bonus plan in 2020, it was re-instated in 2021 with an outcome of 96.25% and 97.5% of the maximum
for the Chief Executive and Chief Financial Officer respectively.
**** Appointed on 1 February 2021.
Chief Executive pay ratio
The table below discloses the ratio of the Chief Executive’s pay for 2022, using the single total figure of remuneration (as disclosed
on page 80), to the comparable earnings of employees at the 25th, 50th and 75th percentiles.
Year
2022
2021
2020
2019
Method
Option B
Option B
Option B
Option B
25th percentile
(P25) pay ratio
Median (P50)
pay ratio
75th percentile
(P75) pay ratio
37:1
54:1
20:1
41:1
29:1
39:1
14:1
30:1
21:1
32:1
11:1
22:1
The ratios were calculated using Option B in the disclosure regulations, with the employees at the 25th, 50th and 75th percentiles
determined based on the Group’s gender pay data. Total remuneration for 2022 for these employees was then calculated using
a valuation methodology consistent with that used for the Chief Executive in the single figure table on page 80. Whilst the gender
pay gap legislation and CEO pay ratio legislation employ different calculations, the Committee considers that the three identified
employees are reasonably representative of the respective percentiles. The calculation is undertaken on a full-time equivalent basis.
The salary and total remuneration received during 2022 by employees at the 25th, 50th and 75th percentiles and used in the above
analysis is as follows:
2022 salary £
2022 total remuneration £
24,720
26,734
32,058
34,292
41,990
46,374
25th percentile (P25)
Median (P50)
75th percentile (P75)
A significant proportion of the Chief Executive’s total remuneration is delivered in variable remuneration, the value of which is
linked to stretching performance targets and, in the case of LTIP awards, share price performance. As a result, the pay ratio is
driven largely by the outcome of these awards hence the significant fluctuations on a year-to-year basis. In comparison to last
year, the pay ratio has decreased, as a result of the reduction in bonus and LTIP outcomes for the Chief Executive, reflecting this
principle of higher proportion of variable remuneration.
The Committee considers the median pay ratio to be consistent with the pay, reward and progression policies for STV’s employees,
the majority of whom receive fixed remuneration only. Only colleagues in the Commercial team or in senior management roles
are eligible to participate in a bonus plan.
Workforce pay
The Committee has oversight of remuneration and related policies across the organisation and gives them due consideration
when determining pay for Executive Directors. All roles across the Company are graded with reference to a compensation and
benefits survey of companies in the UK media and technology sectors undertaken by Willis Towers Watson. The Company’s policy
is to ensure pay and benefits provided are positioned fairly; are market competitive in the context of the relevant talent market;
and reflect market data and other relevant benchmarks for each role. Pay ratios are also considered as one of several reference
points when making decisions on remuneration.
STV Annual Report and Accounts 2022 87
As referenced earlier in this report, the Committee recognises that during 2022 increases to the cost of living have created additional
pressures for some colleagues and the Company has sought to be proactive in seeking to support financial wellbeing, including
additional payments targeted at those most impacted by inflation, providing this is financially sustainable for the Company.
The Company continues to develop its approach to employee engagement on executive remuneration, building on the various
mechanisms in place to gather feedback from colleagues, including regular ‘Have Your Say’ employee engagement surveys;
engagement with trade union representatives which includes a collective bargaining agreement that covers pay determination
for certain members of staff. Relevant feedback is considered by the Board, via the Senior Independent Director in his role as
Employee Director, and through regular updates to the Board on the organisation, people and culture.
Relative importance of spend on pay
The table below sets out the relative importance of spend on pay in the 2022 and 2021 financial years. These were the most
significant outgoings for the Company in the last financial year. Overall spend on pay reduced by 2.8% due to lower levels of
payments triggered under the performance related bonus plans.
Significant distributions
2022
2021 % change
Overall spend on pay
£24.3m
£25.0m
Dividend or share buy back
£5.1m
£4.4m
(2.8%)
15.9%
Consideration by the Directors of matters relating to Directors’ remuneration
Members of the Committee
During the year, the Committee comprised the following Non-Executive Directors: Anne Marie Cannon (Chair); Simon Miller;
Ian Steele; and David Bergg. The Committee met three times during the year.
The Committee is responsible for recommending to the Board the remuneration policy for Executive Directors. The Committee
also has oversight of remuneration and related policies for the wider workforce as this pertains to determining the remuneration
of the Executive Directors. The Committee has formal terms of reference which describe its full remit and can be downloaded
from the Company’s website, www.stvplc.tv.
Advisors to the Committee
The Committee seeks independent advice to assist in its consideration of executive remuneration. This includes updating the
Committee on compensation trends and governance matters and advising the Committee in connection with the design and
operations of the Company’s incentive arrangements.
During 2022, the Committee received advice from Deloitte. The total fees paid to Deloitte for the provision of advice to the
Committee in 2022 were £25,900, charged on a time and materials basis. Deloitte provided no other services to the Company
during the year, however, Deloitte did participate in the Group’s external tender process to appoint a new independent auditor.
Deloitte was successful in this process and upon appointment as the independent auditor will be prohibited from providing other
services, including remuneration advice. This coincided with the lead advisor on remuneration moving to Alvarez & Marsal (‘A&M’)
and in January 2023 A&M was appointed as the independent advisor to the Remuneration Committee.
Deloitte and A&M are both members of the Remuneration Consultants’ Group and have signed up to their Code of Conduct
on executive remuneration consulting. The Committee is satisfied that the advice received from Deloitte and A&M is objective
and independent.
In the course of its deliberations during the period under review, the Committee sought the assistance of the Chairman on matters
relating to the Directors’ performance and remuneration. The Chairman, Chief Executive and the HR & Communications Director
attended Committee meetings by invitation.
Statement of voting at general meeting
The table below shows the voting outcomes on the most recent Remuneration Report (2022 AGM) and Remuneration Policy (2021 AGM).
2021 Remuneration Report (2022 AGM)
30,518,653
74.98
10,185,852
25.02
40,704,505
Remuneration Policy (2021 AGM)
25,095,568
74.94
8,390,031
25.06
33,485,599
3,174
4,063
Votes for
% Votes against
% Total votes cast Votes withheld*
* A vote withheld is not a vote in law and counts neither for nor against a resolution.
As shown in the table above, with around three quarters of votes cast in favour, shareholders approved the Directors’
Remuneration Policy and last year’s Remuneration Report by a clear majority. The voting outcomes were primarily a result of one
shareholder with a significant holding voting against the resolution. While this shareholder is supportive of the performance of the
Executive Directors and the Company’s overall approach to executive remuneration, in engagement with the Committee Chair
they have expressed reservations regarding one specific element of the Policy. The Committee has carefully considered the issues
but, given the strong support of the majority of shareholders (both in engagement and in their voting decisions) and in recognition
of the clear alignment of our framework to both well-established shareholder guidance and market practice, the Company has not
made any changes to reflect the feedback from this one shareholder. The Committee plan to engage with all major shareholders
during the forthcoming triennial review of the Remuneration Policy, and this specific matter will be considered.
Anne Marie Cannon
Chair of the Remuneration Committee
7 March 2023
OverviewAdditional InfoGovernanceFinancial StatementsStrategic Report 88 STV Annual Report and Accounts 2022
Directors’ report
The Directors present their report for the year ended 31 December 2022. The Directors’ report comprises pages 88 to 90
and the sections of the annual report incorporated by reference, as set out below:
Directors during 2022 financial year – See pages 56 and 57
Risk management – See pages 34 to 40
Streamlined Energy and Carbon Reporting (SECR) – See pages 44 and 45 See pages 47 and 48
TCFD report – See pages 42 to 45
Corporate governance report – See pages 55 to 87
Stakeholder engagement (S.172) – See pages 12 and 13
Employee diversity and inclusion – See pages 49 to 51
Employee involvement and engagement –
Principal risks and uncertainties – See pages 37 to 40
Disability reporting – See pages 49 and 50
This Annual Report has been prepared for, and only for, the members of the Company, as a body, and for no other persons. The
Company, its Directors, employees, agents and advisers, do not accept or assume responsibility to any other person to whom
this document is shown or into whose hands it may come, and any such responsibility or liability is expressly disclaimed.
Management Report
The Directors’ report, together with the Strategic Report, set out on pages 4 to 54, form part of the Management Report for the
purposes of DTR 4.1.5R.
Company number
STV Group plc is registered in Scotland under company number SC203873.
Dividends
A final cash dividend of 7.4p per share has been declared for 2022 which, subject to approval at the AGM in April 2023, will be paid
on 26 May 2023, to shareholders on the register at 14 April 2023. The interim dividend for 2022 was 3.9p per share. The proposed
total dividend for 2022 is therefore 11.3p per share.
Share capital and substantial shareholders
On 7 March 2023 there were 46,722,499 ordinary shares of 50p each in issue, each with one vote attached. There were no shares
held in treasury. The rights and obligations to the Company’s shares are set out in its Articles of Association. Details of Directors’
interests in shares can be found on page 84.
As at 7 March 2023, the following information had been received, in accordance with DTR5, from holders of notifiable interests
in STV’s issued share capital:
Shareholders
Slater Investments
Aberforth Partners
M&G Investments
Columbia Threadneedle Investments
Chelverton Asset Mgt
Bohroder Investment Mgt
Octopus Investments
Janus Henderson Investors
Royal London Asset Mgt
Telworth Investments
Canaccord Genuity Wealth Mgt
Unicorn Asset Mgt
Annual General Meeting (AGM)
Shares held
9,301,705
4,841,892
3,308,737
2,507,954
2,205,821
2,087,121
2,006,011
1,677,420
1,417,872
1,414,080
1,408,740
1,400,000
%
19.91
10.36
7.08
5.37
4.72
4.47
4.29
3.59
3.03
3.03
3.02
3.00
Details of the 2023 AGM, together with the resolutions being put to shareholders, can be found in the separate Notice of AGM.
Directors
The Directors of the Company and their profiles are detailed on pages 56 to 58. All the Directors served throughout the year
under review.
Details of Directors’ interest are on page 84 of the Remuneration Report.
In accordance with the Code, at the 2023 AGM each Director will stand for re-election, except for Anne Marie Cannon who will
step down from the Board at the conclusion of the 2023 AGM, having served for more than 8 years.
STV Annual Report and Accounts 2022 89
Directors’ indemnities
Directors and officers of the Company and its subsidiaries have the benefit of a Directors’ and Officers’ liability insurance policy.
The Company’s Articles of Association also provide that every Director and other officer of the Company is to be indemnified from
the assets of the Company against any liability he or she incurs in defending any proceedings brought against them in connection
with the execution of their powers, duties and responsibilities as Directors (provided that judgement is not given against them).
Directors have a statutory duty to avoid situations where they have or can have, any interest that conflicts or possibly may
conflict with the interests of the Company. A Director will not be in breach of that duty if the relevant matter has been authorised
in accordance with the Articles of Association by the other Directors. The Directors confirm that there have been no such conflicts
during the year ended 31 December 2022.
Donations
The Group made no political donations or any contributions to any political party during the year (2021: £nil).
Voting rights and restrictions on transfer of shares
None of the ordinary shares carry any special rights with regard to control of the Company. There are no restrictions on transfers
of shares other than certain restrictions which may from time to time be imposed by laws or regulations. These include those
relating to insider dealing and pursuant to the Company’s share dealing code, whereby the Directors and designated employees
require approval to deal in the Company’s shares.
The Company is not aware of any arrangements between shareholders that may result in restrictions on the transfer of securities
or voting rights. Further details of the rights, restrictions and obligations attaching to the share capital of the Company, including
voting rights, are contained in the Company’s Articles of Association. The Articles may only be amended by special resolution at
a general meeting of shareholders. Copies are available by writing to the Company Secretary and are also open to inspection
at Companies House.
The STV Group plc Employee Benefit Trust, which is used to acquire and hold shares in the Company for the benefit of employees,
waives its right to vote and to receive cash dividends on those shares it holds that are unallocated.
Change of control
All of the Company’s employee share plans contain provisions relating to a change of control. On a change of control, options and
awards granted to employees under the Company’s share plans may vest and become exercisable, subject to the satisfaction of
any applicable performance conditions at that time. Certain of the Company’s credit facilities and banking arrangements contain
change of control clauses under which lenders may cancel their commitments and declare all outstanding amounts immediately
due and payable.
The Channel 3 broadcasting licences require STV, as the licence holder, to notify Ofcom on a change of control. Ofcom would
thereafter be required to determine that any proposed new licence holder was a fit and proper person to hold the licence. There
are no other significant agreements that would take effect, alter or terminate upon a change of control following a takeover bid.
Going concern
The going concern statement is set out on page 102. The statement is incorporated by reference and deemed to form part of
this report.
Statement of Directors’ responsibilities in respect of the financial statements
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law
and regulation.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have
prepared the group and the parent company financial statements in accordance with UK-adopted international accounting standards.
Under company law, Directors must not approve the financial statements unless they are satisfied that they give a true and fair
view of the state of affairs of the group and parent company and of the profit or loss of the group for that period. In preparing the
financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• state whether applicable UK-adopted international accounting standards have been followed, subject to any material departures
disclosed and explained in the financial statements;
• make judgements and accounting estimates that are reasonable and prudent; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and parent
company will continue in business.
The Directors are responsible for safeguarding the assets of the group and parent company and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
The Directors are also responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and
parent company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and parent
company and enable them to ensure that the financial statements and the Directors’ Remuneration Report comply with the
Companies Act 2006.
The Directors are responsible for the maintenance and integrity of the parent company’s website. Legislation in the United
Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
OverviewAdditional InfoGovernanceFinancial StatementsStrategic Report 90 STV Annual Report and Accounts 2022
Directors’ report
Directors’ confirmations
The Directors consider that the Annual Report and accounts, taken as a whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the group’s and parent company’s position and performance, business
model and strategy.
Each of the Directors, whose names and functions are listed in the Board of Directors confirm that, to the best of their knowledge:
• the group and parent company financial statements, which have been prepared in accordance with UK-adopted international
accounting standards, give a true and fair view of the assets, liabilities and financial position of the group and parent company,
and of the profit of the group; and
• the Strategic Report includes a fair review of the development and performance of the business and the position of the group
and parent company, together with a description of the principal risks and uncertainties that it faces.
In the case of each Director in office at the date the Directors’ report is approved:
• so far as the Director is aware, there is no relevant audit information of which the group’s and parent company’s auditors are
unaware; and
• they have taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant
audit information and to establish that the group’s and parent company’s auditors are aware of that information.
By order of the Board
Paul Reynolds
Chairman
7 March 2023
STV Annual Report and Accounts 2022 91
Independent auditors’ report to the members of STV Group plc
Report on the audit of the financial statements
Opinion
In our opinion, STV Group plc’s Group financial statements and Parent company financial statements (the ‘financial statements’):
• give a true and fair view of the state of the Group’s and of the Parent company’s affairs as at 31 December 2022 and of the
Group’s profit and the Group’s and Parent company’s cash flows for the year then ended;
• have been properly prepared in accordance with UK-adopted international accounting standards as applied in accordance
with the provisions of the Companies Act 2006; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report and Accounts (the ‘Annual Report’), which comprise:
the consolidated and Parent company balance sheets as at 31 December 2022; the consolidated income statement, consolidated
statement of comprehensive income, consolidated and Parent company statements of changes in equity, and consolidated and
Parent company statements of cash flows for the year then ended; and the notes to the financial statements, which include a
description of the significant accounting policies.
Our opinion is consistent with our reporting to the Audit and Risk Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (‘ISAs (UK)’) and applicable law. Our
responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section
of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities, and we have fulfilled
our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not provided.
Other than those disclosed in the Corporate Governance Report and the Notes to the Financial Statements, we have provided
no non-audit services to the Parent company or its controlled undertakings in the period under audit.
Our audit approach
Context
The context for our audit was that the Group financial performance has remained broadly consistent with the prior year,
with adjusted operating profit showing a small increase, reflecting a decline in the advertising market offset by growth in the
non-broadcast businesses of Digital and STV Studios. As in prior years, there is a very significant retirement benefit obligation
relative to the size of the Group.
Overview
Audit scope
• Taken together, the entities where we performed our audit work accounted for 100% of Group revenue and 99% of Group
profit before tax.
Key audit matters
• Retirement benefit obligations (Group and Parent).
• Deferred programme production stock (DPS) (Group).
• Carrying value of investments (Parent).
Materiality
• Overall Group materiality: £1,135,000 based on 5% of profit before tax and exceptional items.
• Overall Parent company materiality: 1% of total assets capped at £1,000,000, being an allocation of Group materiality.
• Performance materiality: £851,250 (Group) and £750,000 (Parent company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement (whether
or not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the
allocation of resources in the audit; and directing the efforts of the engagement team. These matters, and any comments we
make on the results of our procedures thereon, were addressed in the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
Carrying value of investments is a new key audit matter this year. Otherwise, the key audit matters below are consistent with last year.
Additional InfoGovernanceOverviewStrategic ReportFinancial Statements 92 STV Annual Report and Accounts 2022
Independent auditors’ report to the members of STV Group plc
Key audit matter
How our audit addressed the key audit matter
Retirement benefit obligations (Group and Parent)
(Refer to note 23 (Retirement benefit schemes))
In assessing whether the key assumptions of discount rate, inflation rates and
mortality were within our acceptable ranges, we undertook the following work:
The Group has a net pension deficit at 31 December
2022 of £63.1m (2021: £79.4m) and the Parent company
a net pension deficit of £29.0m (2021: £35.9m).
The gross defined benefit scheme obligations of the
Group and Parent company are £352.9m (2021: £519.4m)
and £139.0m (2021: £202.0m) respectively.
These balances are significant in the context of the
Consolidated and Parent company balance sheets and
are dependent on certain key assumptions, including the
discount rate, inflation rates and mortality assumptions
adopted by the Directors in the actuarial valuations.
Given the judgements involved and the fact that small
changes to these assumptions can have a material
impact on the overall valuation of the obligation,
this was an area of significant risk in our audit.
Given the material value of the related pension scheme
assets at a Group level of £289.8m (2021: £440.0m)
and Parent company level of £110.0m (2021: £166.1m),
we undertook substantial procedures with regards to
the existence and valuation of these assets.
Deferred programme production stock (DPS) (Group)
(Refer to note 15 (Inventories))
DPS of £12.0m (2021: £11.3m) relates to costs incurred
in the production of programming which is deferred on
the Consolidated balance sheet at the point of initial sale
and charged to the income statement in line with the
associated forecast future revenue.
In prior periods, we considered this to be an area of
significant audit risk. Due to the reducing balance, we
concluded in 2020 that the audit risk was normal, which
continues to be our audit risk assessment for 2022.
However, it remains an area of audit focus because the
support for the carrying value and the charge to the
income statement are based on judgements made
by management in respect of related future revenues.
Carrying value of investments (Parent)
(Refer to note 14 (investments))
The carrying value of investments in the Parent
company balance sheet is £121.8m (2021: £121.8m).
The market capitalisation of the Group as at 31 December
2022 is £129m, this is below the net asset position of the
Company of £232m and represents an impairment trigger.
This is an area of audit focus because the support for the
carrying value is based on judgements and estimates
made by management in their impairment assessment,
in particular in respect of projected cash flows and
discount rate.
• We assessed the competence and objectivity of our own and Management’s
Actuarial experts (who had determined the key assumptions and calculated
the value of the benefit scheme obligations).
• Together with our experts, we discussed the methodology and assumptions
used in calculating the obligation with Management’s experts and challenged
the approaches they had taken to ensure they were appropriate.
• Our work included understanding and assessing the proposed assumptions
at 31 December 2022, testing of internal consistency and reasonableness of
2022 data, and assessing the appropriateness of the method used to calculate
the 31 December 2022 defined benefit obligation.
• We considered the methods by which the assumptions were derived and
how the assumptions sit within our acceptable ranges at the year end,
and year-on-year. This allowed us to challenge if there was any indication
of management bias in the setting of assumptions.
We did not identify any issues in this regard. All of the discount rate, inflation
and mortality actuarial assumptions fell within our acceptable ranges based
on the nature of the schemes and scheme experience.
In respect of the related pension scheme assets, we obtained 3rd party
confirmation for existence of assets with the exception of annuity policies which
are matched with a pension liability. In respect of valuation, where possible,
we independently repriced the asset, and for the remainder obtained other
corroborating evidence.
As a result of our audit work, there were no matters arising which would indicate
that the gross and net defined benefit scheme obligations were materially
misstated, and the associated disclosures contain the required information.
We obtained the sales forecast and related net present value calculations
performed by management to support the carrying value of DPS and undertook
the following work:
• We verified that they were mathematically accurate and the method
of calculation was appropriate and consistent with prior years;
• We challenged management’s forecast for each significant production by
comparison with the actual sales history and prior forecasting accuracy;
• Where relevant we obtained and reviewed new contracts which had been
signed in 2022 and supported future forecasts; and
• We also performed sensitivities on the key assumptions underpinning the net
present value of DPS, being future sales, discount rates and the time period
over which sales could be achieved. We did this by reference to independently
determined benchmarks.
There were no matters arising from the audit work performed, and we did
not identify any indicators that the carrying value of DPS was not recoverable.
In assessing whether there was an impairment to the carrying value of
investments in subsidiaries, we undertook the following work:
• Obtained and verified that value in use calculation used by management was
mathematically accurate and the method of calculation was appropriate;
• Compared management’s cash flow forecast to the board approved forecast,
and compared it to the forecasts used in the going concern and viability
statement for consistency;
• Performed a look back test by comparing previous management forecasts
to actual performance in order to assess management’s ability to accurately
forecast;
• Assessed the reasonableness of the cash flows by comparing to independent
market analysts reports;
• Compared longer term growth rates to PwC’s assessment of growth rates
in entertainment and digital markets and the terminal growth rate to the
Bank of England long term UK growth rate;
• Engaged our valuations experts to benchmark the discount rate used by
management;
• Performed sensitivities on the key assumptions underpinning the cash
flows; and
• Reviewed the financial statement disclosures.
The discount rate used by management was below our independently assessed
benchmark, however application of our independently assessed range of discount
rates did not result in the identification of a material impairment. As a result,
we did not identify any matters that would conclude that the carrying value
of investments in subsidiaries are materially misstated.
STV Annual Report and Accounts 2022 93
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the Group and the Parent company, the accounting processes
and controls, and the industry in which they operate.
As part of our planning procedures, utilising our knowledge of the Group gained in previous audits, we reviewed management’s
Sustainability strategy, assessment of the risks of Climate Change and Governance with regards to the potential impacts of
Climate Change. We formed our own view in concluding that climate risk is not considered to result in a significant audit risk
in the context of the Group and Parent company audits for the current year.
The impact of climate risk on our audit
As part of our planning procedures, utilising our knowledge of the Group gained in previous audits, we reviewed management’s
sustainability strategy, assessment of the risks of climate change and governance with regards to the potential impacts of climate
change. We formed our own view in concluding that climate risk is not considered to result in a significant audit risk in the context
of the Group and Parent company audits for the current year. We also considered the consistency of the disclosures in relation
to climate change (including the disclosures in the Task Force on Climate-related Financial Disclosures (TCFD) section) within the
Annual Report with the financial statements and our knowledge obtained from our audit. Our procedures did not identify any
material impact in the context of our audit of the financial statements as a whole, or our key audit matters for the year ended.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent
of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall materiality
£1,135,000.
£1,000,000.
Financial statements – Group
Financial statements – Parent company
How we determined it
5% of profit before tax and exceptional items
Rationale for
benchmark applied
We have applied this benchmark because we consider
the measure of profit before tax and exceptionals is
the measure most commonly used by the shareholders
to measure the performance of the Group.
1% of total assets, capped at £1,000,000
being an allocation of Group materiality.
We considered the most appropriate benchmark
for the Parent company to be total assets as it is
a holding company.
For each component in the scope of our Group audit, we allocated a materiality that is less than our overall Group materiality.
The range of materiality allocated across components was £14,075-£1,000,000. Certain components were audited to a local
statutory audit materiality that was also less than our overall Group materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope
of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example
in determining sample sizes. Our performance materiality was 75% of overall materiality, amounting to £851,250 for the Group
financial statements and £750,000 for the Parent company financial statements.
In determining the performance materiality, we considered a number of factors – the history of misstatements, risk assessment
and aggregation risk and the effectiveness of controls – and concluded that an amount at the upper end of our normal range
was appropriate.
We agreed with the Audit and Risk Committee that we would report to them misstatements identified during our audit above
£56,750 (Group audit) and £50,000 (Parent company audit) as well as misstatements below those amounts that, in our view,
warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the Group’s and the Parent company’s ability to continue to adopt the going
concern basis of accounting included:
• Checking management’s base case and downside models for mathematical accuracy;
• Validating the appropriateness of key assumptions inherent in the cash flow models and agreeing the opening cash/net
debt position;
• Confirming that downside scenarios were sufficiently severe but plausible in the context of the STV Group plc’s business
and plans;
• Confirming the availability of facilities included in management’s going concern model; and
• Considering compliance with the terms and covenants applicable to the lending facilities in both the base case and
downside cases.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group’s and the Parent company’s ability to continue as a going
concern for a period of at least twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
Additional InfoGovernanceOverviewStrategic ReportFinancial Statements 94 STV Annual Report and Accounts 2022
Independent auditors’ report to the members of STV Group plc
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Group’s and the
Parent company’s ability to continue as a going concern.
In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing material to
add or draw attention to in relation to the directors’ statement in the financial statements about whether the directors considered
it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections
of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’
report thereon. The directors are responsible for the other information, which includes reporting based on the Task Force on
Climate-related Financial Disclosures (TCFD) recommendations. Our opinion on the financial statements does not cover the other
information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report,
any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are
required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material
misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors’ Report, we also considered whether the disclosures required by the UK Companies
Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and
matters as described below.
Strategic report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors’
Report for the year ended 31 December 2022 is consistent with the financial statements and has been prepared in accordance
with applicable legal requirements.
In light of the knowledge and understanding of the Group and Parent company and their environment obtained in the course
of the audit, we did not identify any material misstatements in the Strategic report and Directors’ Report.
Directors’ Remuneration
In our opinion, the part of the Remuneration Report to be audited has been properly prepared in accordance with the Companies
Act 2006.
Corporate governance statement
The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term viability and that part
of the corporate governance statement relating to the Parent company’s compliance with the provisions of the UK Corporate
Governance Code specified for our review. Our additional responsibilities with respect to the corporate governance statement
as other information are described in the Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial statements and our knowledge obtained during the audit,
and we have nothing material to add or draw attention to in relation to:
• The directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;
• The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging
risks and an explanation of how these are being managed or mitigated;
• The directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern
basis of accounting in preparing them, and their identification of any material uncertainties to the Group’s and Parent
company’s ability to continue to do so over a period of at least twelve months from the date of approval of the financial
statements;
• The directors’ explanation as to their assessment of the Group’s and Parent company’s prospects, the period this assessment
covers and why the period is appropriate; and
• The directors’ statement as to whether they have a reasonable expectation that the Parent company will be able to continue
in operation and meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing
attention to any necessary qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term viability of the Group and Parent company was substantially less
in scope than an audit and only consisted of making inquiries and considering the directors’ process supporting their statement;
checking that the statement is in alignment with the relevant provisions of the UK Corporate Governance Code; and considering
whether the statement is consistent with the financial statements and our knowledge and understanding of the Group and Parent
company and their environment obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
corporate governance statement is materially consistent with the financial statements and our knowledge obtained during the audit:
STV Annual Report and Accounts 2022 95
• The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and
provides the information necessary for the members to assess the Group’s and Parent company’s position, performance,
business model and strategy;
• The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and
• The section of the Annual Report describing the work of the Audit and Risk Committee.
We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the Parent company’s
compliance with the Code does not properly disclose a departure from a relevant provision of the Code specified under the Listing
Rules for review by the auditors.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors’ responsibilities in respect of the financial statements, the directors are
responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied
that they give a true and fair view. The directors are also responsible for such internal control as they determine is necessary
to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the Parent company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Group or the Parent company or to cease operations, or have
no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the Group and industry, we identified that the principal risk of non-compliance with laws and
regulations related to compliance with industry regulation (OFCOM), and we considered the extent to which non-compliance might
have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on
the financial statements such as the Companies Act 2006 and UK Tax legislation. We evaluated management’s incentives and
opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined
that the principal risks were related to management bias in accounting estimates and posting inappropriate journal entries to
manipulate revenue or divisional profit allocations. Audit procedures performed by the engagement team included:
• Discussions with management, reading reports from internal audit, reviewing the OFCOM complaints register and consideration
of any known or suspected instances of non-compliance with laws and regulations and fraud or matters reported on the
Group’s whistleblowing helpline;
• Evaluation of management’s controls designed to prevent and detect irregularities;
• Reviewing Board minutes;
• Challenging assumptions and judgements made by management in areas involving significant accounting estimates; and
• Identifying and testing journal entries, in particular any journal entries with unusual account combinations or reallocation
of profits between divisions.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of
non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial
statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one
resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations,
or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations.
We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit
sampling to enable us to draw a conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the Parent company’s members as a body in accordance
with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or
assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent in writing.
Additional InfoGovernanceOverviewStrategic ReportFinancial Statements 96 STV Annual Report and Accounts 2022
Independent auditors’ report to the members of STV Group plc
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the Parent company, or returns adequate for our audit have not been
received from branches not visited by us; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• the Parent company financial statements and the part of the Remuneration Report to be audited are not in agreement with
the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit and Risk Committee, we were appointed by the directors on 4 March 2004 to audit the
financial statements for the year ended 31 December 2004 and subsequent financial periods. The period of total uninterrupted
engagement is 19 years, covering the years ended 31 December 2004 to 31 December 2022.
Other matter
In due course, as required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R, these financial
statements will form part of the ESEF-prepared annual financial report filed on the National Storage Mechanism of the Financial
Conduct Authority in accordance with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditors’ report provides no
assurance over whether the annual financial report will be prepared using the single electronic format specified in the ESEF RTS.
Michael Timar (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Glasgow
7 March 2023
Consolidated income statement
Year ended 31 December 2022
STV Annual Report and Accounts 2022 97
2022
2021
Before
exceptional
items
£m
Exceptional
items
(note 7)
£m
Results for
the year
£m
Before
exceptional
items
£m
Exceptional
items
(note 7)
£m
Results for
the year
£m
Revenue
Net operating expenses
Operating profit
Finance costs
– borrowings
– defined benefit pension schemes
– lease interest
Provision for impairment losses – ELM debtor
Total finance costs
Share of loss of an associate
Gain on sale of non-current asset
Profit before tax
Tax charge
Profit for the year
Attributable to:
Equity holders of the Company
Non-controlling interests
Earnings per share
Basic
Diluted
Note
4
5
8
9
137.8
(112.0)
25.8
–
(0.5)
(0.5)
137.8
(112.5)
144.5
(121.2)
25.3
23.3
(1.1)
(1.4)
(0.5)
–
(3.0)
(0.1)
–
22.7
(5.0)
17.7
17.9
(0.2)
17.7
–
–
–
–
–
–
–
(0.5)
0.1
(0.4)
(0.4)
–
(0.4)
(1.1)
(1.4)
(0.5)
–
(3.0)
(0.1)
–
22.2
(4.9)
17.3
17.5
(0.2)
17.3
(1.2)
(0.8)
(0.3)
–
(2.3)
(0.1)
–
20.9
(1.0)
19.9
19.9
–
19.9
39.3p
37.5p
38.3p
36.6p
43.8p
42.1p
The above consolidated income statement should be read in conjunction with the accompanying notes.
Consolidated statement of comprehensive income
Year ended 31 December 2022
Profit for the year
Items that will not be reclassified subsequently to profit or loss:
Remeasurement of defined benefit pension schemes
Deferred tax (charge)/credit
Revaluation loss on listed investments to market value
Other comprehensive income/(expense) – net of tax
Total comprehensive income for the year
Attributable to:
Owners of the parent
Non-controlling interests
Note
23
20
14
–
(1.7)
(1.7)
–
–
–
0.3
0.3
–
0.6
(0.8)
0.3
(0.5)
(0.5)
–
(0.5)
2022
£m
17.3
6.5
(1.5)
(0.3)
4.7
22.0
22.2
(0.2)
22.0
144.5
(122.9)
21.6
(1.2)
(0.8)
(0.3)
0.3
(2.0)
(0.1)
0.6
20.1
(0.7)
19.4
19.4
–
19.4
42.7p
41.0p
2021
£m
19.4
(17.2)
8.5
(2.3)
(11.0)
8.4
8.4
–
8.4
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
Additional InfoGovernanceOverviewStrategic ReportFinancial Statements
98 STV Annual Report and Accounts 2022
Consolidated and parent company balance sheets
At 31 December 2022
Group
2022
£m
Company
2021
£m
2022
£m
2021
£m
Note
Non-current assets
Intangible assets
Property, plant and equipment
Right-of-use assets
Investments
Deferred tax asset
Trade and other receivables
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total assets
Equity
Ordinary shares
Share premium
Capital redemption reserve
Merger reserve
Other reserve
Accumulated (losses)/profit
Shareholders’ equity
Non-controlling interests
Total equity
Non-current liabilities
Borrowings
Lease liabilities
Retirement benefit obligations
Current liabilities
Trade and other payables
Lease liabilities
Total liabilities
Total equity and liabilities
11
12
13
14
20
16
15
16
21
21
18
19
23
17
19
1.2
10.6
18.6
2.5
21.9
1.5
56.3
47.0
39.9
11.3
98.2
1.6
9.8
19.9
1.9
26.5
0.4
60.1
17.7
30.1
14.7
62.5
–
–
–
121.8
7.3
–
129.1
–
139.7
(5.4)
134.3
154.5
122.6
263.4
23.3
115.1
0.2
173.4
1.8
(321.8)
(8.0)
(0.3)
(8.3)
26.4
18.7
63.1
108.2
53.7
0.9
54.6
162.8
154.5
23.3
115.1
0.2
173.4
1.4
(339.2)
(25.8)
(0.1)
(25.9)
14.4
19.7
79.4
113.5
33.8
1.2
35.0
148.5
122.6
23.3
115.1
0.2
–
1.8
87.8
228.2
–
228.2
–
–
29.0
29.0
6.2
–
6.2
35.2
–
–
–
122.1
9.0
–
131.1
–
138.2
0.3
138.5
269.6
23.3
115.1
0.2
–
1.1
92.6
232.3
–
232.3
–
–
35.9
35.9
1.4
–
1.4
37.3
263.4
269.6
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present
the parent company income statement or statement of comprehensive income. The loss for the parent
company for the year was £2.6m (2021: loss of £3.5m).
The consolidated financial statements on pages 97 to 124 were approved by the Board on 7 March 2023
and were signed on its behalf by:
Simon Pitts
Chief Executive Officer
Lindsay Dixon
Chief Financial Officer
Consolidated and parent company statements of changes in equity
Year ended 31 December 2022
STV Annual Report and Accounts 2022 99
Share
capital
£m
Share
premium
£m
Capital
redemption
reserve
£m
Merger
reserve
£m
Other
reserve
£m
Accumulated
(losses)/profit
£m
Attributable
to owners of
the parent
£m
Non-
controlling
interest
£m
Total
equity
£m
23.3
115.1
0.2
173.4
1.4
(339.2)
(25.8)
(0.1) (25.9)
Group
At 1 January 2022
Profit/(loss) for the year
Other comprehensive income
Total comprehensive income/(expense)
for the year
Net share based compensation
Dividends paid (note 10)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
At 31 December 2022
23.3
115.1
0.2
173.4
At 1 January 2021
Profit for the year
Other comprehensive expense
Total comprehensive income for the year
Net share based compensation
Dividends paid (note 10)
23.3
115.1
0.2
173.4
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
At 31 December 2021
23.3
115.1
0.2
173.4
Company
At 1 January 2022
Loss for the year
Other comprehensive income
Total comprehensive result for the year
Net share based compensation
Dividends paid (note 10)
At 31 December 2022
At 1 January 2021
Loss for the year
Other comprehensive expense
Total comprehensive loss for the year
Net share based compensation
Dividends paid (note 10)
23.3
115.1
0.2
–
–
–
–
–
–
–
–
–
–
23.3
115.1
23.3
115.1
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.2
0.2
–
–
–
–
–
At 31 December 2021
23.3
115.1
0.2
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.4
–
1.8
1.0
–
–
–
0.4
–
1.4
1.1
–
–
–
0.7
–
1.8
1.0
–
–
–
0.1
–
1.1
17.5
4.7
22.2
0.3
(5.1)
(321.8)
(342.8)
19.4
(11.0)
8.4
(0.4)
(4.4)
17.5
4.7
22.2
0.7
(5.1)
(8.0)
(29.8)
19.4
(11.0)
8.4
–
(4.4)
(0.2) 17.3
4.7
–
(0.2) 22.0
–
–
0.7
(5.1)
(0.3)
(8.3)
(0.1) (29.9)
–
–
–
–
–
19.4
(11.0)
8.4
–
(4.4)
(339.2)
(25.8)
(0.1) (25.9)
92.6
(2.6)
2.6
–
0.3
(5.1)
87.8
232.3
(2.6)
2.6
–
1.0
(5.1)
228.2
102.9
242.5
(3.5)
(2.4)
(5.9)
–
(4.4)
(3.5)
(2.4)
(5.9)
0.1
(4.4)
92.6
232.3
Additional InfoGovernanceOverviewStrategic ReportFinancial Statements 100 STV Annual Report and Accounts 2022
Consolidated and parent company statements of cash flows
Year ended 31 December 2022
Operating activities
Cash generated by operations
Interest and fees paid in relation to banking facilities
Corporation tax received/(paid)
Pension deficit funding – recovery plan payment
Contingent cash payment to pension schemes
Net cash (used in)/generated by operating activities
Investing activities
Proceeds from sale of investments
Proceeds from disposal of subsidiary
Purchase of investment in associate
Loan notes provided to associate
Production finance provided to associate
Purchase of intangible assets
Purchase of property, plant and equipment
Net cash (used in)/generated by investing activities
Financing activities
Payment of obligations under leases
Borrowings drawn
Borrowings repaid
Dividends paid
Net cash generated by/(used in) financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Note
22
Group
2022
£m
11.5
(1.1)
0.2
(9.5)
(2.4)
(1.3)
–
–
(0.9)
–
(2.4)
(0.5)
(3.4)
(7.2)
(1.8)
38.0
(26.0)
(5.1)
5.1
(3.4)
14.7
11.3
2021
£m
34.8
(1.4)
(1.2)
(9.3)
(0.3)
22.6
4.7
0.6
(0.6)
(0.4)
(0.6)
(0.4)
(2.5)
0.8
(1.5)
3.1
(11.1)
(4.4)
(13.9)
9.5
5.2
14.7
Company
2022
£m
4.5
–
(1.0)
(3.6)
(0.5)
(0.6)
–
–
–
–
–
–
–
–
–
–
–
(5.1)
(5.1)
(5.7)
0.3
(5.4)
2021
£m
8.0
–
(1.2)
(3.9)
(0.1)
2.8
4.7
0.6
–
–
–
–
–
5.3
–
–
–
(4.4)
(4.4)
3.7
(3.4)
0.3
STV Annual Report and Accounts 2022 101
Notes to the financial statements
For the year ended 31 December 2022
1. General information
The consolidated financial statements of STV Group plc (the ‘Company’) and its subsidiaries (together the ‘Group’) for the
year ended 31 December 2022 were approved and authorised for issue in accordance with a resolution of the Directors
on 7 March 2023. The comparative information is presented for the year ended 31 December 2021.
STV Group plc is a public limited company, limited by shares, incorporated in Scotland, United Kingdom, and is listed on the
London Stock Exchange.
The principal activities of the Group are the production and broadcasting of television programmes, provision of internet
services and the sale of advertising airtime and space in these media.
2. Significant accounting policies
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below.
These policies have been consistently applied to all the years presented.
Basis of preparation
The financial statements are prepared in accordance with IFRS as adopted by the UK Endorsement Board and in accordance
with the UK adopted international accounting standards and with the requirements of the Companies Act 2006 as applicable
to companies reporting under those standards.
These financial statements are presented in Sterling, which is the currency of the primary economic environment in which
the Group and Company operates and rounded to the nearest 0.1 million pounds (£m) except where otherwise indicated.
They have been prepared under the historical cost convention and where other bases are applied these are identified in the
relevant accounting policy below.
Basis of consolidation
The Group financial statements incorporate the financial statements of STV Group plc and all its subsidiaries up to 31 December
each year, using consistent accounting policies.
Subsidiaries are entities over which the Company has control. Control is achieved when the Company has the power over the
subsidiary, is exposed, or has rights to, variable returns from its involvement with the subsidiary, and has the ability to use its
power to affect its returns. Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and
ceases when the Company loses control of the subsidiary. Subsidiary undertakings acquired during the year are recorded
using the acquisition method of accounting and their results are included from the date of acquisition.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated
on consolidation.
An associate is an entity, other than a subsidiary or joint venture, over which the Group has significant influence. Significant
influence is the power to participate in, but not control or jointly control, the financial and operating decisions of an entity.
These investments are also accounted for using the equity method.
Non-controlling interests represent the portion of profit or loss and net assets/(liabilities) in subsidiaries that are not
held by the Group and are presented within equity in the consolidated balance sheet, separately from the Company
shareholders’ equity.
Adoption of new and revised standards
In the current year, the Group has adopted the following new amendments with no material impact:
• Amendments to IFRS 3 Business Combinations; IAS 16 Property, Plant and Equipment; IAS 37 Provisions, Contingent
Liabilities and Contingent Assets; and Annual Improvements 2018-2020 – effective date 1 January 2022
Standards and amendments to standards that have been issued but are not effective for 2022 and have not been early
adopted are:
• Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting
policies – effective date 1 January 2023
• Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting
Estimates – effective date 1 January 2023
• Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction
– effective date 1 January 2023
• IFRS 17 Insurance Contracts – effective date 1 January 2023
• Amendments to IFRS 17 Insurance contracts: Initial Application of IFRS 17 and IFRS 9 – Comparative Information policies
– effective date 1 January 2023
The above standards and amendments issued but not yet effective will be adopted in accordance with their effective dates.
Going concern
At 31 December 2022, the Group was in a net debt position (excluding lease liabilities) of £15.1m comprising drawdowns under
its banking facility of £26.4m partially offset by a gross cash balance of £11.3m. The Group is in a net current asset position
and generates cash from operations that enables the Group to meet its liabilities as they fall due, and other obligations.
The Group has in place a £60m revolving credit facility, with £20m accordion, that matures in March 2026 following exercise of
both one-year extension options that were available to the Group (the second being exercised in March 2023). The covenant
package remains unchanged and includes the key financial covenants of net debt to EBITDA (leverage), which must be less
than 3 times, and interest cover, which must be greater than 4 times.
Additional InfoGovernanceOverviewStrategic ReportFinancial Statements
102 STV Annual Report and Accounts 2022
Notes to the financial statements
For the year ended 31 December 2022
2. Significant accounting policies continued
As part of the going concern review, the Group considers forecasts of the total advertising market, from which the Group
generates the majority of its cash inflows, to determine the impact on liquidity. The Group’s forecasts and projections, taking
account of reasonably possible changes in trading performance, show that the Group will be able to operate within the level
of its current available funding and financial covenants.
The Directors performed a full review of principal risks and uncertainties during the year and approved the Group’s updated
three-year plan covering the period to 31 December 2025 in December 2022. As part of this process, the Board gave specific
consideration and challenge to the first year of this plan and approved it as the budget for FY23. A severe but plausible
downside scenario was identified against the base assumptions in that budget that reflected crystallisation of a number of
risks, principally in relation to advertising revenues and the number and scale of programme commissions. Even under this
scenario, the Group generated sufficient cash to enable it to continue in operation and remain within covenant levels under
the Group banking arrangements. Therefore, the Board concluded that the Group’s forecasts and projections, taking account
of reasonably possible changes in trading performance, show it will be able to operate within the level of its current
available funding and covenant levels.
After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in
operation for at least 12 months from the date of this report. Accordingly, the Group continues to adopt the going concern
basis in preparing its consolidated financial statements.
Revenue recognition
Under IFRS 15, the performance obligations promised in contracts with customers are identified and revenue recognition
is based on an assessment of when control of the good or service promised in the contract is transferred to the customer.
Revenue is recognised when the performance obligation in the contract is satisfied which is either at a ‘point in time’ or
‘over time’ depending on when or as control of the good or service is transferred to the customer.
Key classes of revenue are recognised on the following bases:
i) Advertising and sponsorship revenues
Revenues are stated net of advertising agency commissions.
Television advertising revenue and online advertising revenue are recognised at the point of transmission of the advertisement.
Revenue from sponsorship of the Group’s programmes is recognised on a straight-line basis over the period of the transmission
schedule for each sponsorship campaign.
ii) Programme production revenues
Revenue from third party commissions is recognised on delivery of the finished programme to the commissioning broadcaster
as at that point the performance obligations are delivered and control passes to the broadcaster for the period of their licence.
Revenues from the licencing of programmes to overseas broadcasters or in the UK secondary market (usually digital
channels) is recognised on the licence commencement date. An element of the original cost of production is deferred and
recognised against the future revenue stream expected to be generated in the secondary and overseas sales markets.
The amount to be deferred varies by programme based on future overseas and secondary sales potential and involves
significant estimate (see note 3).
iii) Lottery service revenues
Up to the date of disposal in August 2021, revenue was recognised for lottery operating costs recharged to the Scottish
Children’s Lottery at the point when the lottery draw to which the service related had taken place.
Dividend income
Dividend income is recognised when the right to receive payment is established.
Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received and all attached
conditions will be complied with. When the grant relates to an expense item, it is deducted from the related expense.
When the grant relates to an asset, it is deducted from the asset’s carrying value.
Taxation
Taxation expense comprises current and deferred tax. Tax is recognised in the income statement, except to the extent
it relates to items recognised in other comprehensive income or directly in equity, in which case the related tax is also
recognised in other comprehensive income or directly in equity.
Current tax is the amount of tax payable or recoverable in respect of the taxable profit or loss for the year, using tax rates
that are in force during the period. Taxable profit differs from net profit as reported in the income statement because it
excludes items of income or expense that are taxable or deductible in other financial years and it further excludes items
that are never taxable or deductible.
Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying amounts of
assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit
and is accounted for using the balance sheet liability method. Deferred tax is calculated using tax rates that have been
enacted or substantively enacted at the balance sheet date and are expected to apply when the related deferred tax asset
is realised or the deferred tax liability settled.
Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax liabilities are recognised for
taxable temporary differences arising on investments in subsidiaries, except where the reversal of the temporary difference
can be controlled by the Group and it is probable that the difference will not reverse in the foreseeable future.
STV Annual Report and Accounts 2022 103
Deferred tax assets are recognised to the extent it is probable that taxable profits will be available against which the
deductible temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at each balance
sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current
tax liabilities and when the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority
on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
Exceptional items
Exceptional items are items that are unusual because of their size, nature or incidence and which the Directors consider
should be disclosed separately to enable a full understanding of the Group’s results. They are presented on the face of the
Consolidated Income Statement, in the column headed ‘Exceptional items’, so as to present a transparent view of the
trading of the Group both excluding and including these items.
Exceptional items may include but are not restricted to: profits or losses arising on disposal or closure of a business; the cost
of significant business restructuring; significant impairments of intangible or tangible assets; significant gains or losses on
sale of investments, intangible or tangible assets; adjustments to the fair value of acquisition-related items; other items
deemed exceptional due to their significance, size or nature; and the related exceptional taxation.
Foreign currency translation
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing on the dates of the
transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are reported
at the rates of exchange prevailing at that date. Currency translation differences are recognised in the consolidated
income statement.
Business combinations
Business combinations are accounted for using the acquisition method of accounting. The consideration transferred
in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of
assets transferred, liabilities incurred, and the equity interests issued by the Group in exchange for control of the acquiree.
Acquisition-related costs are recognised in the income statement as incurred.
At the acquisition date, the identifiable assets acquired and liabilities assumed are recognised at their fair value.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interest
in the acquiree and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the
acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If the net of the acquisition-date
amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the
amount of any non-controlling interests in the acquiree and the fair value of the acquirer’s previously held interest in the
acquiree (if any), the excess is recognised immediately in the income statement as a bargain purchase gain (or loss if the
liabilities assumed exceed the identifiable assets).
Goodwill in respect of an acquired business is recognised as an intangible asset. Goodwill is carried at cost less any recognised
impairment losses and is tested at least annually or where there are indicators of impairment.
Intangible assets
Intangible assets, other than goodwill, are held at cost less accumulated amortisation and any provision for impairment.
Included within intangible assets are assets in the course of construction which comprise primarily web development
projects including directly attributable costs to bring the assets into use and may include capitalised borrowing costs.
Amortisation is provided at the following rates per annum to write off the costs of intangible assets, less residual value,
on a straight line basis from the date they are brought into use:
Web development
between 10% and 25%
Property, plant and equipment
The Group’s policy is to state property, plant and equipment at cost less accumulated depreciation and any recognised
impairment loss. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset
to its working condition for its intended use.
Depreciation is provided to write off the cost of the assets, less estimated residual values, in equal annual instalments as follows:
Leasehold improvements
between 5% and 10%
Plant, technical equipment and other
between 10% and 20%
Residual values and useful economic lives are reviewed annually. Depreciation is charged on all additions to, or disposals of,
depreciating assets in the year of purchase or disposal, from the date of addition or to the date of disposal.
Any impairment in value is charged to the income statement.
Leases
The Group assesses whether a contract is or contains a lease at inception of the contract. The Group recognises a right-of-use
asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term
leases (defined as leases with a term of 12 months or less) and leases of low value assets. For these leases, the Group
recognises the lease payments as an operating expense on a straight-line basis over the term of the lease.
Additional InfoGovernanceOverviewStrategic ReportFinancial Statements
104 STV Annual Report and Accounts 2022
Notes to the financial statements
For the year ended 31 December 2022
2. Significant accounting policies continued
Lease liability
The lease liability is initially measured as the present value of the lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease or the Group’s incremental borrowing rate where not readily available.
Lease payments included in the measurement of the lease liability comprise:
• fixed payments (including in-substance fixed payments), less any lease incentives receivable
• variable lease payments that are based on an index or rate, initially measured using the index or rate as at the
commencement date
• amounts expected to be payable by the Group under residual value guarantees
• the exercise price of purchase options, if the Group is reasonably certain to exercise those options; and
• payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined,
which is generally the case for leases in the Group, the Group’s incremental borrowing rate is used, being the rate that the
individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use
asset in a similar economic environment with similar terms, security and conditions.
Lease payments are allocated between principal and finance cost. The finance cost element is charged to the income
statement over the lease period in order to produce a constant periodic rate of interest on the remaining balance of the
liability for each period.
Right-of-use assets
Right-of-use assets comprise the initial measurement of the corresponding lease liability, any lease payments made at
or before the commencement date, less any lease incentives received and any initial direct costs. They are subsequently
measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the shorter of the lease term and the useful life of the underlying asset. If the lease
transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise
a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation
starts at the commencement date of the lease.
Impairment of non-financial assets
The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication
exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (‘CGU’s’) fair value less costs of disposal
and its value-in-use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset
or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset.
Inventories
Inventories are stated at the lower of cost or net realisable value. Cost comprises direct materials, and where applicable,
direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and
condition. Net realisable value represents the estimated selling price less estimated costs of completion and the estimated
selling costs.
• Programme production work in progress
Programme production work in progress for programmes being made for third parties is recorded at cost less any
provision for impairment. When the programme production has been completed, and at the point of delivery to the
commissioner, the inventory value is charged to the income statement to match the cost of production with the revenue
recognised. Certain costs incurred in the development of creative ideas and the programme slate are recognised as
inventory and amortised to the income statement over a period of up to 4 years. This period is deemed to be the average
life of a creative concept from initiation to commissioning.
• Deferred programme production
Deferred programme production stock represents original costs of production that are deferred and recognised against
future revenue streams expected to be generated in the secondary sales markets, or from advertising revenue generated
on STV Player. This is to ensure that revenue and costs are matched as closely as possible. The amount to be deferred
varies by programme based on future secondary sales potential. The estimate of future sales and deferred programme
production stock is referred to in the critical accounting judgements and estimates section (note 3).
• Recorded programmes
Recorded programmes are programmes which the Group purchases for transmission on its broadcast and Video on
Demand platforms. They are valued at direct cost including labour and overheads less appropriate provisions and are
charged to the income statement after the first transmission or sale.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits and other short-term highly liquid investments
that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.
STV Annual Report and Accounts 2022 105
Financial instruments
Financial assets and financial liabilities are recognised in the Group’s balance sheet when the Group becomes a party to
the contractual provisions of the instrument. Financial assets are recorded at amortised cost with the exception of equity
investments which are recognised at fair value through other comprehensive income (FVOCI) and derivative financial
instruments which are recognised at fair value through profit and loss (FVPL). Financial liabilities are measured at
amortised cost.
i) Trade receivables
Trade receivables do not carry any interest and are stated at amortised cost as reduced by appropriate allowances for
estimated irrecoverable amounts. The Group applies the IFRS 9 simplified approach to measuring expected credit losses
which uses a lifetime expected loss allowance for all trade receivables and contract assets.
A provision is established for trade receivables if there is objective evidence that the Group will not be able to collect all
amounts due according to the original terms of trade.
ii) Investments
Investments are classified as fair value through other comprehensive income (FVOCI) with subsequent gains or losses arising
from changes in fair value recognised in other comprehensive income. There is no subsequent reclassification of fair value
gains and losses to profit and loss following the derecognition of the investment.
Equity investments that do not have a quoted market price in an active market and whose fair value cannot be reliably
measured by other means are held at cost unless the Group is deemed to hold significant influence. Investments, whereby the
Group is deemed to hold significant influence, are initially recognised at cost and adjusted thereafter for the post-acquisition
change in the net assets of the investment. A share of the profit or loss, based on equity holding, is recognised in the income
statement for the period.
iii) Classification of financial liabilities and equity
Financial liabilities and equity instruments are classified according to the contractual arrangements entered into. An equity
instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.
iv) Bank borrowings
Interest-bearing bank loans and overdrafts are initially recorded at fair value being the proceeds received, net of direct
issue costs. They are subsequently measured at amortised cost. Finance costs, including premiums payable on settlement or
redemption and direct issue costs, are accounted for using an effective interest rate method and are added to the carrying
amount of the instrument to the extent that they are not settled in the period in which they arise.
v) Trade payables
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method.
vi) Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
vii) Derivative financial instruments and hedge accounting
From time-to-time the Group uses derivative financial instruments to hedge its exposure to fluctuations in interest rates.
The Group does not qualify for hedge accounting under IFRS 9 therefore any gains or losses arising from the movement
in fair value are taken to the income statement.
The fair value of the interest rate swap contracts is calculated every six months on a discounted cash flow basis using
market forward rates.
Pensions
For defined benefit pension schemes, the annual service cost is calculated using the projected unit credit method and is
recognised over the future service lives of participating employees, in accordance with the advice of qualified actuaries.
Current service cost and administration expenses are recognised in operating costs and net interest on the net pension
liability is recognised in finance costs.
The finance cost recognised in the consolidated income statement reflects the net interest on the net pension liability.
This represents the change in the net pension liability resulting from the passage of time, and is determined by applying
the discount rate to the opening net liability, taking into account employer contributions paid into the scheme, and hence
reducing the net liability during the year.
Past service costs resulting from enhanced benefits are recognised immediately in the consolidated income statement.
Actuarial gains and losses, which represent the difference between interest on scheme assets, experience on the defined
benefit obligation and the effect of changes in actuarial assumptions, are recognised in full in the consolidated statement
of comprehensive income in the year in which they occur.
The retirement benefit obligation recognised in the consolidated balance sheet comprises the net total for each scheme of
the present value of the benefit obligation, using a discount rate based on yields at the balance sheet date on appropriate
high-quality corporate bonds that have maturity dates approximating the terms of the Group’s obligations and are
denominated in sterling, minus the fair value of the scheme assets at the balance sheet date.
Payments to defined contribution schemes are charged to the income statement as an expense as they fall due.
Additional InfoGovernanceOverviewStrategic ReportFinancial Statements
106 STV Annual Report and Accounts 2022
Notes to the financial statements
For the year ended 31 December 2022
2. Significant accounting policies continued
Share-based payments
The Group issues equity-settled share-based payments to certain employees. A fair value for the equity-settled share
awards is measured at the date of grant. The Group measures the fair value of each award using an appropriate option
pricing model.
The fair value of each award is recognised as an expense over the vesting period on a straight-line basis, after allowing
for an estimate of the share awards that will eventually vest. The level of vesting is reviewed at each reporting period
and the charge is adjusted, where appropriate, to reflect actual and estimated levels of vesting.
Dividend distribution
Final dividends are recorded in the financial statements in the period in which they are approved by the Company’s
shareholders. Interim dividends are recorded in the period in which they are approved and paid.
3. Critical accounting judgements and estimates
The preparation of the consolidated and Company financial statements, in conformity with IFRS, requires management to
make judgements that affect the application of accounting policies and the use of estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting year. Management bases these judgements and estimates on a combination of past experience,
professional expert advice and other evidence that is relevant to each individual circumstance. Actual results may differ from
these judgements and the resulting estimates and are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the year in which the estimate is revised. Significant judgements in the current year and on a recurring basis
are presented to the Audit & Risk Committee.
Judgements
In the course of preparing the financial statements, no judgements have been made in applying the Group’s accounting
policies that have had a significant effect on the amounts recognised in the consolidated Group or parent company financial
statements, other than those involving estimation below.
Estimates
The Directors consider the following to be the key estimates applicable to the financial statements, which have a significant
risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year or in
the long term:
Group
Inventory
Deferred programme production stock forms part of inventory and is stated in the financial statements at the lower of
cost or net realisable value. The key assumption is estimating the likely future revenues for which associated programme
costs are expensed in line with. A detailed forecast of future secondary sales is prepared by management based on historic
experience and expected future trends. £1.4m was expensed through the income statement in the year (2021: £1.5m).
Additional information is disclosed in note 15.
Pension obligations
The present value of the pension obligations depends on several factors that are determined on an actuarial basis using
a number of assumptions. The assumptions used in determining the net cost/(income) for pensions include the discount
rate and mortality rate. Any changes in these assumptions will impact the carrying amount of pension obligations.
The Group determines the appropriate discount rate at the end of each year. This is the rate that should be used to determine
the present value of estimated future cash outflows expected to be required to settle the pension obligations. In determining
the appropriate discount rate, the Group considers the interest rates of high-quality corporate bonds that are denominated
in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related
pension liability.
Regarding mortality, the base tables used are updated every three years (to coincide with triennial valuations) or more
frequently when there is evidence of a change in experience. The CMI tables relating to future improvements in mortality
are updated when new information is available, usually annually.
Other key assumptions for pension obligations are based in part on current market conditions. Additional information,
along with details of sensitivities, is disclosed in note 23.
Company
Carrying value of parent company investments
The Company’s policy is to carry out annual reviews of the carrying value of investments. In determining the recoverable
amount, key assumptions are made regarding future performance, growth rates and discount rate. Based on forecast
cashflows of subsidiary undertakings, the Directors consider that the investments’ recoverable amount is greater than
its carrying value and consequently no impairment is considered necessary. Additional information is disclosed in note 14.
STV Annual Report and Accounts 2022 107
4. Business segments
Information reported to the Group’s Chief Executive for the purposes of resource allocation and assessment of segment
performance is by product. The Group’s operating segments are Broadcast, Digital and Studios. The trade of STV ELM is
included within ‘Other’ up to the date of disposal in August 2021.
Sales
Inter-segment sales
Segment revenue
Segment result
Adjusted operating profit
Unallocated corporate expenses
Adjusted operating profit
Exceptional items (note 7)
HETV tax credits (note 27)
Finance costs
Share of loss in associate
Profit before tax
Tax charge
Profit for the year
Broadcast
Digital
Studios
Other
Total
2022
£m
2021
£m
107.6
(12.5)
95.1
108.8
(9.7)
99.1
2022
£m
19.0
–
19.0
2021
£m
17.8
–
17.8
2022
£m
23.9
(0.2)
23.7
2021
£m
27.0
(0.4)
26.6
20.7
21.8
8.5
7.9
1.4
1.3
2022
£m
–
–
–
–
2021
£m
1.0
–
1.0
2022
£m
2021
£m
150.5
(12.7)
137.8
154.6
(10.1)
144.5
–
30.6
31.0
(4.8)
(5.8)
25.8
(0.5)
–
(3.0)
(0.1)
22.2
(4.9)
17.3
25.2
(0.8)
(1.9)
(2.3)
(0.1)
20.1
(0.7)
19.4
Adjusted operating profit (as shown above) is the statutory operating profit before exceptional items and includes High-End
Television (HETV) tax credits receivable. The HETV tax credits relate solely to the Studios operating segment. In the current
year, no HETV tax credit claims were made (2021: £1.9m) and so there is no impact on the adjusted operating profit metric
from this adjustment (2021: statutory operating loss of £0.6m).
Revenue includes £1.7m from sources outside the UK (2021: £1.1m). Operating profit includes £1.0m arising outside the UK
(2021: £0.7m).
Broadcast
Digital
Studios
Total
Segment assets and liabilities
Assets
Liabilities
Segment total
Unallocated corporate assets
Unallocated corporate liabilities
Consolidated
2022
£m
2021
£m
40.2
(17.6)
22.6
29.6
(22.3)
7.3
2022
£m
2.3
–
2.3
2021
£m
1.9
–
1.9
2022
£m
71.0
(36.4)
34.6
2021
£m
33.0
(7.7)
25.3
2022
£m
2021
£m
113.5
(54.0)
59.5
64.5
(30.0)
34.5
41.0
(108.8)
58.1
(118.5)
(8.3)
(25.9)
Segment assets consist primarily of property, plant and equipment, certain leased assets, inventories, trade and other
receivables and cash and bank deposits. In the prior year amounts due from HMRC in regard to HETV tax relief is disclosed
within Studios. All other corporation tax balances are disclosed within corporate.
Segment liabilities comprise operating liabilities including trade and other payables and provisions and certain lease
liabilities. They exclude Group borrowings, retirement benefit obligations, tax liabilities and other non-current liabilities,
including the remaining lease liabilities.
The increase in Studios assets and liabilities primarily relates to the cost of production of Criminal Record and the associated
monies received and deferred from Apple TV+. The programme will be delivered in 2023 and all associated costs and
deferred income will be recognised on delivery.
All the net assets in 2021 and 2022 were held in the UK and therefore operate in a single geographical segment.
Other segment information
Capital additions
Depreciation and amortisation
Broadcast
Digital
Other
Total
2022
£m
2.3
1.9
2021
£m
2.0
2.0
2022
£m
0.5
0.9
2021
£m
0.4
1.0
2022
£m
1.1
2.0
2021
£m
0.5
2.3
2022
£m
3.9
4.8
2021
£m
2.9
5.3
Additional InfoGovernanceOverviewStrategic ReportFinancial Statements
108 STV Annual Report and Accounts 2022
Notes to the financial statements
For the year ended 31 December 2022
5. Net operating expenses
Programming and production costs
Staff costs (note 6)
Other operational costs
Depreciation and amortisation
Exceptional items (note 7)
Services provided by the Group’s auditors
During the year the Group obtained the following services from the Company’s auditors:
Group
Fees payable to Company auditors for the audit of the parent company and consolidated
financial statements
Fees payable to the Company’s auditors and their associates for other services:
– The audit of the Company’s subsidiaries pursuant to legislation
– Audit-related assurance services
Included in the audit fees payable is £6,000 (2021: £5,000) paid in respect of the parent company.
6. Staff
Group
Aggregate remuneration
Wages and salaries
IFRS 2 expense
Social security costs
Other pension costs
Total aggregate remuneration
Average monthly number of employees (including Executive Directors)
Permanent
Contract
Total average number of employees
2022
£m
56.0
28.8
22.4
4.8
112.0
0.5
112.5
2021
£m
62.6
28.7
24.6
5.3
121.2
1.7
122.9
2022
£000
2021
£000
250
45
35
330
2022
£m
24.3
0.8
2.9
0.8
28.8
207
38
35
280
2021
£m
25.0
0.5
2.4
0.8
28.7
2022
Number
2021
Number
463
37
500
441
22
463
Contract staff numbers consist of employees on fixed-term contracts and does not include those on freelance contracts.
Details of Directors’ remuneration is provided in the Remuneration Report on pages 72 to 87.
Company
The Company had no employees during the current or preceding year.
The only element of Director remuneration recognised in the Company income statement in the year is the estimated
charge associated with share-based payments of £0.8m (2021: £0.2m). No Director received any other remuneration from
the Company during the year (2021: £nil). The emoluments of the Directors are paid by another Group company which
makes no recharge to the parent company.
STV Annual Report and Accounts 2022 109
7. Exceptional items
To provide the users of the consolidated financial statements with a transparent view of significant and/or non-recurring
items and their impact on the underlying trading of the Group, the Group presents items recognised in profit or loss for each
year analysed between:
i) Profit before exceptional items; and
ii) The effect of exceptional items
The table below analyses the exceptional items in the current financial year and their impact on key financial statement
lines in the consolidated income statement.
2022
2021
Before
exceptional
items
£m
Exceptional
items
£m
Results for
the year
£m
Before
exceptional
items
£m
Exceptional
items
£m
Results for
the year
£m
25.8
(3.0)
(0.1)
–
22.7
(5.0)
17.7
39.3p
37.5p
(0.5)
–
–
–
(0.5)
0.1
(0.4)
25.3
(3.0)
(0.1)
–
22.2
(4.9)
17.3
23.3
(2.3)
(0.1)
–
20.9
(1.0)
19.9
(1.7)
0.3
–
0.6
(0.8)
0.3
(0.5)
38.3p
36.6p
43.8p
42.1p
21.6
(2.0)
(0.1)
0.6
20.1
(0.7)
19.4
42.7p
41.0p
Operating profit (i)
Finance costs (ii)
Share of loss of an associate
Gain on sale of non-current asset (iii)
Profit before tax
Tax charge (iv)
Profit for the year
Earnings per share
Basic
Diluted
i) Operating profit
On 8 December 2022, the Group announced an extended partnership with ITV for digital content and advertising sales.
The agreement is effective from 1 January 2023, however there were a small number of one-off costs incurred in 2022
as part of the agreement reached, principally redundancy and legal costs, that have been presented as exceptional in
the current year. Please refer to note 28 for further information.
In May 2021, the Group repaid the full amount of furlough grants received in 2020 under the Government’s Coronavirus
Job Retention Scheme (£1.7m) before resuming payment of cash dividends to shareholders. The Group presented the
cost of repayment as exceptional so as not to distort the underlying trading results of the business.
ii) Finance costs
In the prior year, an exceptional credit of £0.3m was recognised relating to amounts recovered from the Scottish
Children’s Lottery (SCL) in excess of the expected credit loss provided for in 2020.
iii) Gain on sale of non-current asset
In 2021, an exceptional gain of £0.6m was recognised, being net proceeds received on disposal of STV ELM Ltd.
iv) Tax (charge)/credit
Tax adjustments are the tax effects of the exceptional items recognised in both years.
8. Tax charge
Corporation tax
Current year charge
High-end television tax credit
Adjustments in respect of prior years
Deferred tax (note 20)
Tax charge for the year
2022
£m
1.8
–
–
1.8
3.1
4.9
2021
£m
0.9
(1.9)
(0.2)
(1.2)
1.9
0.7
Additional InfoGovernanceOverviewStrategic ReportFinancial Statements
110 STV Annual Report and Accounts 2022
Notes to the financial statements
For the year ended 31 December 2022
8. Tax charge continued
The charge for the year can be reconciled to the profit per the income statement as follows:
Profit before tax
Tax at the UK corporation tax rate of 19% (2021: 19%)
Tax effects of:
Other expenses not deductible for tax purposes
High-end television tax credits
Impact of changes in tax rates
Changes in estimates related to prior years
Tax charge for the year
2022
£m
22.2
4.2
–
–
0.7
–
4.9
2021
£m
20.1
3.8
0.4
(1.9)
(1.4)
(0.2)
0.7
9. Earnings per share
The calculation of earnings per share is based on earnings after tax and the weighted average number of ordinary shares in
issue during the year, excluding ordinary shares purchased by the Company and held for use by the STV Employee Benefit Trust.
For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion
of all dilutive potential ordinary shares. The Group has one type of dilutive potential ordinary shares namely share options
granted to employees.
The adjusted earnings per share figures that have also been calculated are based on earnings before adjusting items that
are significant in nature and/or quantum and not expected to recur every year and are therefore considered to be distortive.
The adjusting items recognised in the current and prior years are operating and non-operating exceptional items and the
IAS 19 net financing cost, as well as the related tax effect. Adjusted earnings per share have been presented to provide
shareholders with an additional measure of the Group’s year on year performance.
Earnings per share
Basic earnings per share
Diluted earnings per share
Basic earnings per share (before exceptional items)
Diluted earnings per share (before exceptional items)
Adjusted basic earnings per share
Adjusted diluted earnings per share
The following reflects the earnings and share data used in the calculation of earnings per share:
Earnings
Profit for the year attributable to equity shareholders
Exceptional items (net of tax)
Profit for the year (before exceptional items)
Excluding IAS 19 net financing cost
Adjusted profit
Number of shares
Weighted average number of ordinary shares for the purposes of basic earnings per share
Dilution due to share options
Weighted average number of ordinary shares for the purposes of diluted earnings per share
2022
pence
38.3p
36.6p
39.3p
37.5p
42.3p
40.4p
2022
£m
17.5
0.4
17.9
1.4
19.3
2022
million
45.6
2.2
47.8
2021
pence
42.7p
41.0p
43.8p
42.1p
45.6p
43.8p
2021
£m
19.4
0.5
19.9
0.8
20.7
2021
million
45.5
1.8
47.3
Ref
(i)
(ii)
Details of the adjustments to earnings are as follows:
i) Exceptional items (net of tax) £0.4m (2021: £0.5m)
Exceptional charge of £0.5m (2021: £0.8m), net of related tax credit of £0.1m (2021: £0.3m). See note 7 for more details.
ii) Adjustment for IAS 19 financing cost £1.4m (2021: £0.8m)
An adjustment for the IAS 19 financing cost of £1.4m (2021: £0.8m). The IAS 19 financing cost is adjusted as it is a
non-cash item that relates to historical defined benefit pension schemes; there is no tax associated with this amount
as it is non-deductible for corporation tax purposes.
10. Dividends
Dividends on equity ordinary shares
Paid final dividend
Paid interim dividend
Dividends paid
STV Annual Report and Accounts 2022 111
2022
per share
2021
per share
2022
£m
7.3p
3.9p
11.2p
6.0p
3.7p
9.7p
3.3
1.8
5.1
2021
£m
2.7
1.7
4.4
A final dividend of 7.4p per share (2021: 7.3p per share) has been proposed by the Board of Directors and is subject to
approval by shareholders at the 2023 AGM scheduled for 27 April 2023. The proposed dividend would be payable on 26 May
2023 to shareholders who are on the register at 14 April 2023. The ex-dividend date is 13 April 2023. This final dividend,
amounting to £3.4m has not been recognised as a liability in these financial statements.
11. Intangible assets
Cost
At 1 January 2021
Additions
At 1 January 2022
Additions
At 31 December 2022
Accumulated amortisation and impairment
At 1 January 2021
Amortisation
At 1 January 2022
Amortisation
At 31 December 2022
Net book value at 31 December 2022
Net book value at 31 December 2021
12. Property, plant and equipment
Cost
At 1 January 2021
Additions
Transfers
At 1 January 2022
Additions
Transfers
At 31 December 2022
Accumulated depreciation and impairment
At 1 January 2021
Charge for year
At 1 January 2022
Charge for year
At 31 December 2022
Net book value at 31 December 2022
Net book value at 31 December 2021
Web
development
£m
5.7
0.4
6.1
0.5
6.6
3.4
1.1
4.5
0.9
5.4
1.2
1.6
Total
£m
32.5
2.5
–
35.0
3.4
–
38.4
22.6
2.6
25.2
2.6
27.8
10.6
9.8
Leasehold
improvements
£m
Plant,
technical
equipment
and other
£m
Assets under
construction
£m
0.4
–
–
0.4
–
–
0.4
0.1
0.1
0.2
-
0.2
0.2
0.2
30.8
–
3.0
33.8
–
2.3
36.1
22.5
2.5
25.0
2.6
27.6
8.5
8.8
1.3
2.5
(3.0)
0.8
3.4
(2.3)
1.9
–
–
–
–
–
1.9
0.8
The Group and Company did not have any capital commitments at 31 December 2022 (2021: nil).
Additional InfoGovernanceOverviewStrategic ReportFinancial Statements
112 STV Annual Report and Accounts 2022
Notes to the financial statements
For the year ended 31 December 2022
13. Right-of-use assets
The balance sheet shows the following amounts relating to leases:
Cost
At 1 January 2021
Additions
Derecognition of assets
At 1 January 2022 and 31 December 2022
Depreciation
At 1 January 2021
Disposals
Charge for the year
At 1 January 2022
Charge for the year
At 31 December 2022
Net book value at 31 December 2022
Net book value at 31 December 2021
Property
£m
Vehicles
£m
Total
£m
13.9
11.0
–
24.9
3.6
–
1.5
5.1
1.3
6.4
18.5
19.8
0.3
0.1
(0.1)
0.3
0.2
(0.1)
0.1
0.2
–
0.2
0.1
0.1
14.2
11.1
(0.1)
25.2
3.8
(0.1)
1.6
5.3
1.3
6.6
18.6
19.9
The addition in the prior year relates to the lease extension of the Group Head office building at Pacific Quay, Glasgow.
14. Investments
Group
Listed
Associates
Other
2022
£m
2021
£m
–
2.4
0.1
2.5
0.3
1.5
0.1
1.9
Listed investments comprise entirely of shares held in Mirriad Advertising plc and are measured at fair value through the
Consolidated Statement of Comprehensive Income.
The movement in investments in associates during 2022 relates to the acquisition of a 25% stake in quiz show producer,
Mighty Productions Limited, for consideration of £0.9m in March 2022. The investment was initially recognised at cost and
has subsequently been updated to reflect the Group’s share of post-acquisition losses (less than £0.1m) in accordance with
the equity method of accounting. The Group acquired a 25% shareholding in the unscripted production company, Hello
Mary, for consideration of £0.6m in September 2021 with subsequent recognition of the Group’s accumulated share of the
loss of £0.1m. The Group also owns a 25% stake in Two Cities Television which has a carrying value of £0.9m at both balance
sheet dates. No dividends have been received from any associate undertaking.
Company
Share in Group undertakings
Other investments
Listed
2022
£m
2021
£m
121.8
121.8
–
121.8
0.3
122.1
Impairment of investments in subsidiary undertakings
At the end of each reporting period the Company assesses whether there is any indication that its investments in subsidiary
undertakings may be impaired. Where such indications exist, the recoverable amount of the associated investment is
calculated by determining the higher of its fair value less cost of disposal and value in use, which is then compared to
the carrying value of the investment. Where the fair value less cost of disposal cannot be determined, the value in use is
deemed to be the recoverable amount. The value in use is calculated based on the five year cash flow projections which are
grounded in the three year plan, prepared by the Management Board and subsequently approved by the Board in December
2022. Overall, the forecast demonstrated strong revenue and profit growth in Studios and Digital in particular, albeit offset
in the early part of the period by declines in advertising as a result of an anticipated recession in the UK. A terminal value
was determined thereafter based on growth of 2.0%. (2021: 1.5%). The resulting valuation provided headroom against the
investment carrying value.
STV Annual Report and Accounts 2022 113
Further sensitivities were modelled to provide management with comfort that no impairment would be required, namely a
+/- 1% change in discount rate and also an operating profit fall in 2023 of 10% followed by flat performance. Both scenarios
still left the Group with headroom. The post-tax discount rate applied was 8.8% (2021: 7.3%).
Based on the above the Directors consider that the investments’ recoverable amount is greater than their carrying value
and consequently no impairment is considered necessary.
Subsidiary undertakings
A full list of subsidiary undertakings as at 31 December 2022 is as follows:
Undertaking
Principal activity
Registered address
STV News Services Limited*
STV Television Limited
STV Central Limited
STV North Limited
STV Studios Limited
STV Drama Productions Limited
STV Drama Productions 2 Limited
STV Drama Productions 3 Limited
STV Tod Productions Limited
Primal Media Limited (52%)
Ginger Television Productions Limited
SKA Ginger Productions Limited (50%)
Altissimo Music Limited
stv.tv Limited
Solutions.tv Limited
Grampian Television Limited
STV Services Limited*
Scottish News Network Limited
Rise & Shine (Television) Limited*
Peoples champion.com Limited
The Ginger Media Group Limited
* directly held
Investment holding undertaking
Investment holding undertaking
Television broadcasting
Television broadcasting
Programme production
Programme production
Programme production
Programme production
Programme production
Programme production
Dormant
Dormant
Music rights
Dormant
Dormant
Dormant
Group services undertaking
Dormant
Dormant
Dormant
Dormant
(1)
(1)
(1)
(1)
(1)
The registered address for all companies (except where noted) is Pacific Quay, Glasgow, G51 1PQ.
(1) 9 Savoy Street, London, WC2E 7EG
The investments are stated in the balance sheet at cost less amounts written off for impairment in value. All the above
investments are 100% shareholdings except where stated.
15. Inventories
Deferred programme production
Programme production work in progress
Recorded programmes
Group
2022
£m
12.0
35.0
–
47.0
2021
£m
11.3
5.9
0.5
17.7
Deferred programme production stock represents costs of original production which are deferred and recognised against
future revenue streams expected to be generated in the secondary sales market. This asset is classified as current, even
though it will be realised into cash over several years, due to the homogeneous nature of the inventory which would result
in an arbitrary split between the current and non-current categories, and to be consistent with normal industry practice.
It is anticipated that £1.1m (2021: £1.0m) is likely to be realised within 12 months.
At 31 December 2022, the net present value (NPV) of the future sales, estimated over a maximum period of 15 years for
drama and 10 years for other genres of programming, was £15.1m (2021: £17.8m), with the net book value of £12.0m
(2021: £11.3m). A discount rate of 8.8% (2021: 7.3%) was applied. Revenues in 2023 are expected to be £2.2m.
The sensitivities regarding the principal assumptions used to support the carrying value of the deferred programme
production stock are set out below:
Assumption
Change in assumption
Impact on NPV
Discount rate
Rate of price inflation (RPI)
Sales
Increase/decrease by 0.25%
Increase/decrease by 0.25%
Increase/decrease by 10.0%
Decrease/increase by £0.2m
Increase/decrease by £0.2m
Increase/decrease by £1.4m
Additional InfoGovernanceOverviewStrategic ReportFinancial Statements
114 STV Annual Report and Accounts 2022
Notes to the financial statements
For the year ended 31 December 2022
16. Trade and other receivables
Trade receivables
Amounts owed by Group undertakings
Prepayments
Contract assets
Other receivables
Income tax recoverable
Group
Current
Non-current
Company
Current
2022
£m
22.6
–
4.1
8.7
4.0
0.5
39.9
2021
£m
18.6
–
1.7
6.3
1.0
2.5
30.1
2022
£m
–
–
–
–
1.5
–
1.5
2021
£m
–
–
–
–
0.4
–
0.4
2022
£m
–
138.5
–
–
1.2
–
139.7
Group
At 31 December, the ageing analysis of the trade receivables, net of any provisions for impairment, is as follows:
Not past due
Up to 30 days overdue
Between 30 and 90 days overdue
Over 90 days overdue
2022
£m
18.6
3.2
0.4
0.4
22.6
2021
£m
–
136.4
0.1
–
1.1
0.6
138.2
2021
£m
16.5
1.4
0.4
0.3
18.6
The Group engages in a number of contra deals whereby advertising is provided in exchange for goods and services instead
of cash consideration. Balances that are more than 90 days overdue relate to the proportion of contra deals not yet utilised
by the Group.
The Group applies the simplified approach to measuring expected credit losses, and so uses a lifetime expected loss
allowance. At 31 December 2022, trade receivables with an initial carrying value of £0.1m (2021: £0.1m) were impaired
and fully provided for. The movements in the provision were as follows:
At 1 January
Charge for the year
Amounts utilised
Unused amounts reversed
2022
£m
0.1
0.1
(0.1)
–
0.1
2021
£m
0.3
–
(0.1)
(0.1)
0.1
The Directors consider that the carrying amount of trade and other receivables approximates their fair value.
Except for those trade receivables that have been provided for, all trade receivables are expected to be recovered.
Contract assets (accrued income) primarily relate to the Group’s right to consideration for work completed but not billed
at the reporting date.
Company
Amounts owed by Group undertakings are considered to have low credit risk and the loss allowance recognised during
the year was therefore limited to 12 months expected credit losses. The amounts were not material.
All amounts owed by Group undertakings are unsecured, interest free and have no fixed date of repayment. These are
trade related and disclosed within current receivables as they are repayable on demand.
17. Trade and other payables
Current
Trade payables
Accrued expenses
Contract liabilities
Amounts owed to Group undertakings (payable on demand)
Bank overdraft
Social security and other taxes
STV Annual Report and Accounts 2022 115
Group
2022
£m
Company
2021
£m
2022
£m
2021
£m
8.1
11.3
31.1
–
–
3.2
53.7
4.2
21.4
2.4
–
–
5.8
33.8
–
–
–
6.2
–
–
6.2
–
0.1
–
1.3
–
–
1.4
The Directors consider that the carrying amount of trade and other payables approximates their fair value.
Contract liabilities (deferred income) primarily relate to the consideration received from customers in advance of transferring
a good or service.
18. Borrowings
Bank loans
Group
2022
£m
26.4
2021
£m
14.4
Since March 2021, the Group has had in place a £60m revolving credit facility, with £20m accordion. The original tenor was
3 years, however two one-year extension options have been exercised (in February 2022 and March 2023) with the facility
now extending to March 2026. Commercial terms are in line with the existing facility and the covenant package also remains
unchanged. Key covenants are net debt to EBITDA (leverage) must be less than 3 times, and interest cover must be greater
than 4 times.
The effective interest rate was:
Bank loans (floating)
19. Lease liabilities
Current
Non-current
The income statement shows the following amounts relating to leases:
Interest expense (included in finance costs)
Maturity analysis
Not later than 1 year
Later than 1 year but not later than 5 years
Later than 5 years
Less: future finance charges
Present value of lease obligations
2022
%
3.7
Group
2022
£m
0.9
18.7
19.6
Group
2022
£m
0.5
Minimum payments
Present value
of payments
2022
£m
1.4
5.6
17.7
24.7
(5.1)
19.6
2021
£m
1.6
6.0
18.9
26.5
(5.6)
20.9
2022
£m
0.9
4.0
14.7
19.6
2021
%
1.8
2021
£m
1.2
19.7
20.9
2021
£m
0.3
2021
£m
1.2
4.1
15.6
20.9
Additional InfoGovernanceOverviewStrategic ReportFinancial Statements
116 STV Annual Report and Accounts 2022
Notes to the financial statements
For the year ended 31 December 2022
20. Deferred tax asset
The analysis of the deferred tax balance is as follows:
Deferred tax asset to be recovered after more than one year
Group
2022
£m
2021
£m
(21.9)
(26.5)
Company
2022
£m
(7.3)
2021
£m
(9.0)
The movement in deferred tax assets and liabilities during the year, taking into consideration the offsetting of balances
within the same tax jurisdiction, is as follows:
Group
At 1 January 2021
(Credit)/charge to income
Credit to equity/OCI
At 1 January 2022
(Credit)/charge to income
(Credit)/charge to equity/OCI
At 31 December 2022
Company
At 1 January 2021
Charge to income
Credit to equity/OCI
At 1 January 2022
Charge to income
Charge to equity/OCI
At 31 December 2022
Tax
trading
losses
£m
Other
temporary
differences
£m
Accelerated
tax
depreciation
£m
Retirement
benefit
obligations
£m
(5.3)
(0.1)
–
(5.4)
–
–
(5.4)
–
–
–
–
–
–
–
(0.5)
–
–
(0.5)
(0.1)
(0.1)
(0.7)
–
–
–
–
–
–
–
(0.8)
–
–
(0.8)
0.7
–
(0.1)
–
–
–
–
–
–
–
(13.3)
2.0
(8.5)
(19.8)
2.5
1.6
(15.7)
(6.9)
0.8
(2.9)
(9.0)
0.8
0.9
(7.3)
Total
£m
(19.9)
1.9
(8.5)
(26.5)
3.1
1.5
(21.9)
(6.9)
0.8
(2.9)
(9.0)
0.8
0.9
(7.3)
Changes to the UK corporation tax rates were substantively enacted as part of Finance Bill 2021 on 10 June 2021. These
included an increase in the UK corporation tax rate to 25% effective from 1 April 2023. The deferred tax balances at
31 December 2022 have been stated at a rate of 25% (2021: 25%), which is the rate at which the temporary differences
are expected to unwind.
A deferred tax asset has been recognised in respect of certain temporary differences as it is probable that the Group
will generate sufficient taxable profits in the future against which these temporary differences can be offset.
A deferred tax asset of £13.5m has not been recognised (2021: £13.5m, disclosure updated to include capital losses not
recognised) and relates to a combination of trading tax losses, capital losses and non-trade costs. There are no associated
expiry dates applicable.
Company
Loss category
STV Group plc
STV News Services Ltd
STV Central Ltd
STV Television Ltd
Capital
Non-trade loan relationships
Trading
Management expenses
Gross
amount
£m
Deferred tax
asset not
recognised
£m
42.7
8.7
1.8
0.7
10.7
2.2
0.4
0.2
21. Ordinary shares and share premium
Group and Company
At 1 January and 31 December 2022
Number of
shares
(thousands)
Ordinary
shares
£m
Share
premium
£m
Total
£m
46,723
23.3
115.1
138.4
The total authorised number of ordinary shares is 63 million shares (2021: 63 million shares) with a par value of £0.50 per share
(2021: £0.50 per share). All issued shares are fully paid.
STV Annual Report and Accounts 2022 117
22. Notes to the consolidated and parent statement of cash flows
Group
Company
Operating profit/(loss) for the year
Adjustments for:
Depreciation and amortisation (note 5)
Share based payments
Increase in inventories
(Increase)/decrease in trade and other receivables (excluding STV ELM Ltd)
Increase in trade and other payables (excluding STV ELM Ltd)
Net decrease in STV ELM Ltd working capital
Decrease in intra Group balances
Cash generated by operations
Non-cash investing and financing activities
Right-of-use assets of nil (2021: £11.1m) were acquired during the year.
Net debt reconciliation
2022
£m
25.3
4.8
0.8
(29.3)
(10.6)
20.5
–
–
11.5
2021
£m
21.6
5.3
0.5
(2.3)
(2.3)
11.2
0.8
–
34.8
2022
£m
(1.2)
–
0.8
–
–
0.4
–
4.5
4.5
At 1 January 2021
Cash flows
Non-cash flows (i)
At 1 January 2022
Cash flows
Non-cash flows (i)
At 31 December 2022
Long-term
borrowings
£m
Cash
and cash
equivalents
£m
Net (debt)/
cash
£m
Lease
liabilities
£m
(22.7)
8.8
(0.5)
(14.4)
(11.8)
(0.2)
(26.4)
5.2
9.5
–
14.7
(3.4)
–
11.3
(17.5)
18.3
(0.5)
0.3
(15.2)
(0.2)
(15.1)
(10.8)
1.5
(11.6)
(20.9)
1.8
(0.5)
(19.6)
2021
£m
(2.9)
–
0.2
–
0.3
0.1
–
10.3
8.0
Net debt
including
lease
liabilities
£m
(28.3)
19.8
(12.1)
(20.6)
(13.4)
(0.7)
(34.7)
(i) Non-cash movements relate to the amortisation of borrowing costs (for long-term borrowings), the acquisition of right-of-use assets and
lease interest.
23. Retirement benefit schemes
Defined contribution schemes
The Group operates two money purchase schemes, the STV Pension Scheme and the Pearl & Dean Cinemas Pension Scheme.
Total employer contributions expensed by the Group in the year was £0.8m (2021: £0.8m).
Defined benefit schemes
The Group operates two defined benefit pension schemes, the benefits of which are related to service and final salary. The
schemes are trustee administered and the schemes’ assets are held independently from those of the Group. Pension costs
are assessed in accordance with the advice of an independent professionally qualified actuary.
The schemes are the Scottish and Grampian Television Retirement Benefit Scheme and the Caledonian Publishing Pension
Scheme. Both are closed schemes and accounted for under the projected unit method.
The net deficit of the schemes is recognised in the consolidated balance sheet, with the deficit of the Caledonian Publishing
Pension Scheme recognised in the Company balance sheet, as STV Group plc is the sponsoring employer. In both the Group
and Company balance sheets, the net deficits are presented within non-current liabilities, as follows:
Defined benefit scheme obligations
Defined benefit scheme assets
Net pension deficit
Group
2022
£m
(352.9)
289.8
(63.1)
2021
£m
(519.4)
440.0
(79.4)
Company
2022
£m
(139.0)
110.0
(29.0)
2021
£m
(202.0)
166.1
(35.9)
A related, offsetting deferred tax asset for the Group of £15.7m (2021: £19.8m) and the Company of £7.3m (2021: £9.0m)
is included within non-current assets. Therefore, the pension scheme deficit net of deferred tax for the Group was £47.4m
at 31 December 2022 (2021: £59.6m) and the Company was £21.7m (2021: £26.9m).
Additional InfoGovernanceOverviewStrategic ReportFinancial Statements
118 STV Annual Report and Accounts 2022
Notes to the financial statements
For the year ended 31 December 2022
23. Retirement benefit schemes continued
Assumptions used to estimate the scheme obligations
The significant actuarial assumptions used for accounting purposes reflect prevailing market conditions in the UK and are
as follows:
Rate of increase in salaries
Rate of increase of pensions in payment
Discount rate
Rate of price inflation (RPI)
Group and Company
2022
%
nil
3.45
4.85
3.45
2021
%
nil
3.55
1.90
3.55
Assumptions regarding future mortality experience are set based on advice, published statistics and experience in each
scheme and are reflected in the table below (average life expectations of a pensioner retiring at age 65).
Retiring at balance sheet date:
Male
Female
Retiring in 25 years:
Male
Female
Group
2022
Years
20.9
23.1
22.1
24.4
2021
Years
21.0
23.2
22.3
24.6
Company
2022
Years
20.4
22.7
21.9
24.1
2021
Years
20.6
22.8
22.1
24.3
The sensitivities regarding the principal assumptions used to measure the defined benefit obligation are set out below:
Assumption
Change in assumption
Impact on scheme liabilities
Group
Discount rate
Rate of price inflation (RPI)
Rate of mortality
Company
Discount rate
Rate of price inflation (RPI)
Rate of mortality
Increase/decrease by 0.25%
Increase/decrease by 0.25%
Decrease by 1 year
Decrease/increase by 3%
Increase/decrease by 1%
Decrease by 4%
Increase/decrease by 0.25%
Increase/decrease by 0.25%
Decrease by 1 year
Decrease/increase by 3%
Increase/decrease by 1%
Decrease by 5%
These sensitivities have been calculated to show the movement in the defined benefit obligations in isolation, and assuming
no other changes in market conditions at the balance sheet date.
Defined benefit scheme assets
The movement in the fair value of the defined benefit scheme’s assets is analysed below:
Fair value of scheme assets at 1 January
Interest income
Return on plan assets excluding interest income
Contributions from the employer
Administrative expenses paid from plan assets
Benefits paid from plan
Fair value of scheme assets at 31 December
Group
2022
£m
440.0
8.2
(146.1)
12.5
(1.3)
(23.5)
289.8
2021
£m
437.2
5.4
12.7
11.0
(2.0)
(24.3)
440.0
Company
2022
£m
166.1
3.1
(52.8)
4.4
(0.7)
(10.1)
110.0
2021
£m
166.2
2.0
3.9
4.6
(0.8)
(9.8)
166.1
At 31 December 2022, the assets were invested in a diversified portfolio that consisted primarily of investment funds and
debt instruments. One of the schemes also holds insurance policies that pay an income into the scheme. The corresponding
assets are included within the fair value of the scheme assets. The fair value of the Scheme’s assets is shown below:
STV Annual Report and Accounts 2022 119
At 31 December 2022
At 31 December 2021
Quoted
£m
Unquoted
£m
Total
£m
Quoted
£m
Unquoted
£m
–
151.5
25.4
–
–
176.9
86.5
6.0
(4.0)
9.7
14.7
112.9
86.5
157.5
21.4
9.7
14.7
289.8
9.1
201.9
21.7
–
–
232.7
149.1
26.5
5.0
7.1
19.6
207.3
At 31 December 2022
At 31 December 2021
Quoted
£m
Unquoted
£m
–
62.7
10.2
–
72.9
35.1
(0.4)
(1.6)
4.0
37.1
Total
£m
35.1
62.3
8.6
4.0
110.0
Quoted
£m
Unquoted
£m
3.4
81.4
8.1
–
92.9
59.3
9.0
1.9
3.0
73.2
Total
£m
158.2
228.4
26.7
7.1
19.6
440.0
Total
£m
62.7
90.4
10.0
3.0
166.1
Group
Investment funds
Debt instruments
Cash and cash equivalents
Derivatives
Annuity policies
Company
Investment funds
Debt instruments
Cash and cash equivalents
Derivatives
Note the prior year comparative has been updated to reflect £7.5m (Group) and £3.2m (Company) of assets previously
disclosed within unquoted investment funds to unquoted derivatives to be consistent with current year classification.
Defined benefit scheme obligations
The movement in the present value of the defined benefit obligation is analysed below:
Defined benefit obligation at 1 January
Experience loss
Interest cost
Remeasurement (gains)/losses
Benefits paid from the schemes
Defined benefit obligation at 31 December
Group
2022
£m
519.4
10.9
9.6
(163.5)
(23.5)
352.9
2021
£m
507.5
16.3
6.2
13.7
(24.3)
519.4
Company
2022
£m
202.0
3.5
3.7
(60.1)
(10.1)
139.0
2021
£m
202.4
1.4
2.4
5.6
(9.8)
202.0
The defined benefit obligation at 31 December 2022 includes an amount of £14.7m relating to the benefits payable to the
holders of the annuity contracts.
Amounts recognised through the income statement
Amounts recognised through the consolidated income statement are as follows:
Amount charged to net operating expenses:
Administration expenses
Amount charged to finance costs:
Net interest expense
Total charged in the consolidated income statement
Amounts recognised through the statement of comprehensive income
The amounts recognised in the consolidated statement of comprehensive income are:
Return on plan assets excluding interest income
Actuarial losses on liabilities arising from change in:
– demographic assumptions
– financial assumptions
– experience adjustments
Total recognised in the consolidated statement of comprehensive income
2022
£m
(1.3)
(1.4)
(2.7)
2022
£m
(146.1)
11.0
152.5
(10.9)
6.5
2021
£m
(2.0)
(0.8)
(2.8)
2021
£m
12.8
(42.5)
28.8
(16.3)
(17.2)
Additional InfoGovernanceOverviewStrategic ReportFinancial Statements
120 STV Annual Report and Accounts 2022
Notes to the financial statements
For the year ended 31 December 2022
23. Retirement benefit schemes continued
Funding arrangements
Contribution rates to the scheme are determined by a qualified independent actuary on the basis of a triennial valuation
using the projected unit method. The most recent triennial valuation was carried out as at 31 December 2020. This valuation
resulted in a deficit of £116m on a pre-tax basis at 30 September 2021 compared to £127.0m on a pre-tax basis at the
previous settlement date of 28 February 2019. The next triennial valuation will take place as at 31 December 2023.
Deficit recovery plans, which end on 31 October 2030, have been agreed with aggregate monthly payments unchanged from
the previous recovery plans. The 2022 deficit recovery payments totalled £9.5m, with annual payments then increasing at
the rate of 2% per annum over the term of the recovery plans. A contingent cash mechanism is also in place, which triggers
contingent funding payments equivalent to 20% of any outperformance above a benchmark of available cash to be paid
to the schemes.
The recovery plans are designed to enable the schemes to reach a fully funded position, using prudent assumptions about
the future, by 2030.
24. Share-based compensation
The purpose of the share-based compensation plans is to align the interests of management and employees with those
of shareholders by providing incentives to improve the Company’s performance on a long-term basis, thereby increasing
shareholder value.
The Company has the following plans currently operating:
i) Long-term incentive plans
ii) Employee share plans
Total share-based compensation costs were £0.8m (2021: £0.5m).
i) Long-term incentive plans (LTIP)
The Group has a long-term incentive plan for Executive Directors and other senior executives. Awards are normally granted
in the form of a right to acquire shares in the Company for a zero or nominal amount. Awards vest over a period of at least
three years, subject to the satisfaction of performance conditions.
The performance measures are agreed by the Remuneration Committee based on what they consider to be aligned with the
delivery of strategy and creation of long term shareholder value. The Committee has discretion to use different or additional
measures or weightings to ensure that the LTIP remains appropriately aligned to the business strategy and objectives. The
performance measures are based on a combination of earnings growth and total shareholder return and are valued based
on an appropriate option pricing model.
The assumptions used for the 2022 LTIP valuation are:
Risk-free interest rate expected
Dividend yield expected share
Price volatility
Awards granted under the Company’s long term incentive plan that were outstanding at the end of the year had the
following market prices at the date of award:
%
1.5
2.5
43.3
Year awarded
2014 LTIP
2015 LTIP
2016 LTIP
2017 LTIP
2019 LTIP
2020 LTIP
2021 LTIP
2022 LTIP
Market price on
grant date
£
2022
Number
2021
Number
3.40
4.25
3.67
3.65
3.55
2.85
3.30
3.20
1,873
1,607
3,755
7,118
209,565
542,413
468,448
471,267
1,873
1,607
3,755
7,118
417,461
542,413
468,448
–
ii) Employee share plans
The employee share plans are open to all employees. They provide for a grant price approximately equal to 90% of the middle
market quotation of a share on the dealing day last preceding the relevant date of invitation, as derived from the London
Stock Exchange daily office list, and can be purchased once a year. There are currently 3 employee share plans outstanding
and the exercise prices for options under these plans range from £2.47 to £3.31. At 31 December 2022 there were 537,320
(2021: 439,369) options outstanding under the plans. The employee share plans are valued using the Black-Scholes model.
STV Annual Report and Accounts 2022 121
Employee Benefits Trust
The Group has investments in its own shares as a result of shares purchased by the STV Employees’ Benefit Trust (‘EBT’).
Transactions with the Group-sponsored EBT are included in these financial statements and consist of the EBT’s purchases of
shares in STV plc, which is accounted for as a reduction to retained earnings. The table below shows the number of STV plc
shares held in the EBT at 31 December 2022 and the purchases/(releases) from the EBT made in the year to satisfy awards
under the Group’s share schemes disclosed above and in relation to shares awarded to certain employees for the
achievement long term service milestones (Loyalty awards):
Scheme
Shares held at
Number of shares
(released)/purchased
LTIP releases – all employee share award
SAYE releases
Loyalty releases
Shares purchased
1 January 2022
1,250,301
(90,301)
(4,290)
(5,148)
31,470
Nominal
value
£
625,150
31 December 2022
1,182,032
591,016
The total number of shares held by the EBT at 31 December 2022 represents 2.52% (2021: 2.67%) of STV’s issued share capital.
The market value of own shares held at 31 December 2022 is £3.2m (2021: £4.3m).
25. Financial risk management
Capital management
The Group’s objectives when managing capital are to safeguard it’s ability to continue as a going concern in order to provide
returns for shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost
of capital.
The capital structure of the Company consists of debt, which includes the bank loans disclosed in note 18, cash and cash
equivalents and equity attributable to equity holders of the parent, comprising issued share capital, reserves and retained
earnings.
The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital.
Net debt is calculated as total borrowings less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown
in the consolidated balance sheet plus net debt. The gearing ratios at 31 December 2022 and 2021 were as follows:
Total borrowings (note 18)
Cash and cash equivalents
Net debt/(cash)
Total equity
Total capital
2022
£m
26.4
(11.3)
15.1
(8.3)
6.8
222%
2021
£m
14.4
(14.7)
(0.3)
(25.9)
(26.2)
1%
Covenants
The Group is subject to two financial covenants in respect of its committed borrowing facilities. The terms of the Facility
Agreement contain the following covenants (i) the ratio of average net debt to adjusted earnings (pre exceptional) before
interest, tax, depreciation and amortisation (EBITDA) and (ii) the ratio of adjusted EBITDA to cash interest, both of which
are tested quarterly. The Group complied with all the covenants in each of the test periods to the balance sheet date.
Financial risk management objectives
The Group’s activities expose it to a variety of financial risks: currency risk, credit risk, liquidity risk and cash flow interest
rate risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks
to minimise potential adverse effects on the Group’s financial performance.
Risk management is carried out under policies approved by the Board with financial risks being identified, evaluated and
hedged in close co-operation with the Group’s operating divisions. The Board provides written principles for overall risk
management, as well as written policies covering specific areas, such as currency risk, interest rate risk, credit risk, use
of financial instruments and investing excess liquidity.
a. Currency risk
The Group operates almost wholly within the UK and is exposed to minimal currency risk. The Group’s borrowings are
denominated in Sterling which is also the Group’s intra-UK net currency flow. Currency risk arises primarily with respect to
the Euro and the US dollar and from future commercial transactions and trade assets and liabilities in foreign currencies.
No further active management of currency risk is required. The Group has minimal exposure to currency risk and it is Group
policy to ensure that all material payments or receipts are fully hedged. At 31 December 2022 the Group had no forward
foreign currency contracts in place (2021: £nil).
Additional InfoGovernanceOverviewStrategic ReportFinancial Statements
122 STV Annual Report and Accounts 2022
Notes to the financial statements
For the year ended 31 December 2022
25. Financial risk management continued
b. Credit risk
Credit risk is the risk of losses due to the failure of the Group’s customers to meet their payment obligations towards the
Group. In prior years, the only significant concentration of credit risk related to monies due from the Scottish Children’s
Lottery. The Group disposed of its lottery operation in the prior year and therefore is no longer exposed to this risk. The
Group has policies in place to ensure that sales are made to customers with an appropriate credit history. Independent
credit ratings are sought for all potential customers and based on the outcome of the feedback from the ratings agency,
a judgement is made on the appropriate level of credit to be given.
c. Liquidity risk
Liquidity risk is the risk that the Group will be unable to meet its payment obligations. Prudent liquidity management
implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount
of committed credit facilities and the ability to close out market positions. Due to the nature of the underlying business,
the aim is to maintain flexibility in funding by keeping committed credit lines available.
Management monitors rolling forecasts of the Group’s liquidity reserve (comprising the undrawn borrowing facility (note 18)
and cash and cash equivalents) on the basis of expected cash flow. This is generally carried out at a Group level. In addition,
the Group’s liquidity management policy includes projecting cash flows and considering the level of liquid assets necessary
to meet these: monitoring balance sheet liquidity ratios against internal targets and bank facility requirements; and
maintaining debt financing plans.
d. Cash flow interest rate risk
As the Group has no significant interest bearing assets, the Group’s income and operating cash flows are substantially
independent of changes in market interest rates. The Group’s interest rate risk arises from long-term borrowings.
Borrowings issued at short-term floating rates expose the Group to cash flow interest rate risk.
Regular sensitivity analysis is carried out, and on the level of borrowings of the Group at 31 December 2022, a movement
of 1.00% in interest rates would change the level of interest paid in the year by +/- £0.3m (2021: £0.1m). 1.00% is considered
a reasonably possible change from significant increase in the bank of England base rate already incurred in the year.
26. Transactions with related parties
Key management compensation
Key management personnel are deemed to be the Executive and Non-Executive Directors of the Group, as they have
authority and responsibility for controlling the Group’s activities. Key management remuneration is detailed as follows:
Short-term employee benefits*
* See the Directors’ Remuneration Report on pages 72 to 87 for details.
2022
£m
1.5
2021
£m
2.1
Other related party transactions
The Group agreed to provide programme production financing to Two Cities for the production of Blue Lights, a drama series
commissioned by the BBC and scheduled for delivery over the course of December 2022 and early January 2023. £3.0m was
drawn down at the balance sheet date. The facility was originally due to mature at the end of September 2022 but was
extended to June 2023 to allow for full delivery and receipt of tax credit owed before repayment. The Group also provided
a working capital loan of £0.2m (2021: nil).
The Group provided advertising with an estimated fair value of £0.5m (2021: £0.8m) for nil consideration to the charity
organisation STV Appeal.
Amounts paid to the Group’s retirement benefit plans are set out in note 23.
27. Reconciliation of statutory results to adjusted results
In reporting financial information, the Group presents alternative performance measures (APMs) which are not defined or
specified under the requirements of IFRS. The Group believes that these APMs, which are not considered to be a substitute for
or superior to IFRS measures, provide stakeholders with additional helpful information on the performance of the business.
The Group makes certain adjustments to the statutory profit measures to exclude the effects of exceptional items and
adjust for other material amounts that it believes are distortive to the underlying trading performance of the Group.
By presenting these alternative performance measures, the Group believes it is providing additional insight into the
performance of the business that may be useful to stakeholders.
STV Annual Report and Accounts 2022 123
Below sets out a reconciliation of the statutory results to the adjusted results:
2022
2021
Operating
profit
£m
Profit
before tax
£m
Basic
earnings
per share
Pence
Operating
profit
£m
Profit
before tax
£m
Statutory result
Exceptional items (note 7)
Result for the year before exceptional items
IAS 19 net finance costs
High-End Television tax credit
Adjusted results
25.3
0.5
25.8
–
–
25.8
22.2
0.5
22.7
1.4
–
24.1
38.3p
1.0p
39.3p
3.0p
–
42.3p
21.6
1.7
23.3
–
1.9
25.2
20.1
0.8
20.9
0.8
1.9
23.6
Basic
earnings
per share
Pence
42.7p
1.1p
43.8p
1.8p
–
45.6p
IAS 19 related items, principally the net finance cost included in the consolidated income statement, are excluded from
non-statutory measures as they are non-cash items that relate to legacy defined benefit pension schemes.
The Group meets the eligibility criteria to claim HETV tax relief through the production of certain dramas created in its
Studios division. This incentive was introduced in the UK to support the creative industries and is a critical factor when
assessing the viability of investment decisions in the production of high-end drama programmes. These production tax
credits are reported within the total tax charge in the Consolidated Income Statement in accordance with IAS 12. However,
STV considers the HETV tax credits to be a contribution to production costs and therefore more aligned to working capital in
nature. Therefore, the adjusted results for the Group reflect these credits as a contribution to operating cost and not a tax
item. There were no HETV tax credits claimed in the current year.
28. Contingent liabilities and other commitments
Group
The Group has commitments under its new arrangements with ITV to pay a tech fee and commencement fee in H1 2023.
The amount of these payments has not been finalised at the balance sheet date, or to the date of this report and accounts,
but is expected to be in the region of £2.6m.
Company
Under a group registration for Value Added Tax, the companies within the Group are jointly and severally liable for Value
Added Tax due by any member of the group registration. At 31 December 2022, the Value Added Tax payable by other
members of the group registration amounted to £2.3m (2021: £5.0m).
Additional InfoGovernanceOverviewStrategic ReportFinancial Statements
124 STV Annual Report and Accounts 2022
Five year summary
For the year ended 31 December 2022
Results
Revenue
Profit from operations before exceptional items
Profit on ordinary activities before taxation and exceptional items
Assets
Non-current assets
Current assets
Total assets
Equity and liabilities
Current liabilities
Non-current liabilities
Equity attributable to the owners
Non-controlling interests
Total equity and liabilities
Key statistics
Earnings per ordinary share – basic
– diluted
Dividends per ordinary share
2018
£m
2019
£m
2020
£m
2021
£m
2022
£m
125.9
123.8
107.1
144.5
137.8
20.1
17.2
40.1
43.4
83.5
21.5
121.1
(59.1)
–
83.5
4.2p
4.1p
20.0p
22.6
19.0
52.0
41.0
93.0
22.0
118.3
(47.1)
(0.2)
93.0
41.7p
40.3p
6.3p
18.2
15.4
50.1
46.2
96.3
24.1
102.1
(29.8)
(0.1)
96.3
18.2p
17.5p
9.0p
23.3
20.9
60.1
62.5
122.6
35.0
113.5
(25.8)
(0.1)
122.6
42.7p
41.0p
11.0p
25.8
22.7
56.3
98.2
154.5
54.6
108.2
(8.0)
(0.3)
154.5
38.3p
36.6p
11.3p
STV Annual Report and Accounts 2022 125
Corporate advisers
Registrars
Link Group
10th Floor, Central Square
29 Wellington Street
Leeds LS1 4DL
Tel: +44 (0)371 664 0300*
Email: shareholderenquiries@linkgroup.co.uk
Shareholder Portal: www.signalshares.com
Independent auditors
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
141 Bothwell Street
Glasgow G2 7EQ
Solicitors
Herbert Smith Freehills LLP
Exchange House
Primrose Street
London EC2A 2HS
Burness Paull LLP
120 Bothwell Street
Glasgow G2 7JL
Principal bankers
Santander UK plc
2 Triton Square
Regent’s Place
London NW1 3AN
Joint corporate brokers
Panmure Gordon & Co
One New Change
London EC4M 9AF
Shore Capital Markets
Cassini House
57 St James’s Street
London SW1A 1LD
Secretary and registered office
Eileen Malcolmson
STV Group plc
Pacific Quay
Glasgow G51 1PQ
Tel: 0141 300 3000
Email: eileen.malcolmson@stv.tv
Company registration number
SC203873
Annual Report on internet
The 2022 Annual Report of STV Group plc including the financial statements is available at: www.stvplc.tv
Investor relations
For investor enquiries please contact:
Kirstin Stevenson
Head of Communications
STV Group plc
Pacific Quay
Glasgow G51 1PQ
Tel: 0141 300 3886
Email: kirstin.stevenson@stv.tv
* Calls are charged at the standard geographic rate and will vary by provider. Calls outside the UK will be charged at the applicable
international rate. Lines are open between 9am-5:30pm, Monday to Friday excluding public holidays in England and Wales.
Additional InfoGovernanceOverviewStrategic ReportFinancial Statements 126 STV Annual Report and Accounts 2022
Shareholder services
Share price information
The share price of STV Group plc is published in most newspapers and the current price of the Company’s shares (delayed by up
to 15 minutes) can be obtained from the Company’s website www.stvplc.tv
Individual Savings Accounts (ISAs)
The Company has Maxi and Mini ISAs which offer United Kingdom resident shareholders a simple, low-cost and tax efficient way
to invest in the Company’s shares. Full details and an application form are available from Stocktrade, a division of Brewin Dolphin
Securities Limited, on: 0131 240 0441.
Shareholder queries
If you have any questions in relation to your shareholding, please contact Link Group, 10th Floor, Central Square, 29 Wellington
Street, Leeds, LS1 4DL; email: shareholderenquiries@linkgroup.co.uk; telephone +44 (0) 371 664 0300*.
Shareholder portal
You can register online to view your holdings using the Shareholder Portal, a service offered by Link Group at www.signalshares.com.
The Shareholder Portal is an online service enabling you to quickly and easily access and maintain your shareholding online –
reducing the need for paperwork and providing 24 hour access for your convenience. Through the Shareholder Portal you may:
• Cast your proxy vote online
• View your holding balance and get an indicative valuation
• View movements on your holding
• View the dividend payments you have received
• Update your address
• Register and change bank mandate instructions so that dividends can be paid directly to your bank account
• Elect to receive shareholder communications electronically
• Access a wide range of shareholder information including the ability to download shareholder forms
Dividend payment options
UK shareholders: STV normally pays dividends twice each year and we would like to encourage you to elect to have your dividends
paid directly into your bank account. This is a more secure method of payment and avoids delays or cheques being lost. You can
sign up for this service on the Shareholder Portal www.signalshares.com. This will allow you to receive all future dividends direct
to your chosen account.
Non-UK shareholders: If you are resident outside the UK you can have any dividends in excess of £10 paid into your bank
account directly via Link Group international payments service. Details and terms and conditions may be viewed at
https://ww2.linkassetservices.com/ips
* Calls are charged at the standard geographic rate and will vary by provider. Calls outside the UK will be charged at the applicable
international rate. Lines are open between 9am-5:30pm, Monday to Friday excluding public holidays in England and Wales.
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STV Zero is an ambitious and wide-reaching sustainability
strategy to become net zero carbon by 2030; and to
encourage viewers, colleagues and partners to help
create a more sustainable society, as together we
tackle humanity’s greatest challenge.
Our programme of activities and related targets to reduce
the carbon impact of the business covers five key areas:
• energy consumption
• waste reduction
• programme making
• promoting sustainability using STV’s reach
• achieving a sustainable supply chain
Visit stvplc.tv/social-impact/sustainability
STV Group plc
Pacific Quay
Glasgow G51 1PQ
Tel: 0141 300 3000
www.stv.tv
Company Registration Number SC203873