The profits warning posted by stv owners, SMG, on Friday – and sent as an e-alert to allmediascotland.com newsletter subscribers – not only resulted in a massive, 20 per cent drop in the City’s valuation of the company, it probably has put paid to any hopes acting chief executive, Donald Emslie, might harbour of becoming appointed on a more permanent basis.
In a statement to the Stock Exchange on Friday morning, SMG said “the board now believes that [our] profits for the full year, 2006, will fall materially behind its previous expectations”.
The reason identified is a drop in TV and cinema advertising revenue, though the company also pointed out that its outdoor advertising company, Primesight, and its radio arm, Virgin, were doing well.
Only a few weeks ago, merger talks between SMG and UTV, based in Northern Ireland, foundered because SMG believed its shareholders deserved around 55 per cent of any combined entity. That’s because the City then valued SMG at about