The shares slumped 44p to 430p as the group announced that disruption of its airtime sales operations was largely behind a fall in interim profits from pounds 3.1m to pounds 1.7m.
The company also predicted that profits for the whole of 1994 would probably fall by almost a third to pounds 9m ( pounds 13.1m).
STV said the disruption to its airtime sales came after it and Granada were forced to end their joint sales operation because Granada's takeover of LWT breached the rules governing the size of ITV sales groupings.
William Brown, chairman, said: 'We argued to the Department of Trade and Industry and to the Office of Fair Trading that expulsion from recently established sales arrangements would inevitably endanger our advertising revenue.' The results had proved the case.
The problem was compounded by the joint sales operation, called Time Exchange, being in dispute over prices with one of its largest advertisers, Unilever, throughout the period.
STV's share of ITV's net advertising revenue fell from 5.2 to 4.9 per cent in the six months to 30 June. Meanwhile, restructuring sales arrangements - STV joined TSMS in September - and the closure of its Edinburgh studio contributed to exceptional costs of pounds 2.5m.
Mr Brown, announcing a 5 per cent increase in the dividend to 2.2641p (2.1563p), said the company was not counting on getting any advertising from Unilever this year although negotiations were going well for 1995.
Meanwhile, Scottish Television Enterprises, the group's network production subsidiary, which makes programmes such as Taggart, boosted its profits to pounds 1.3m ( pounds 800,000).
The group also announced that, despite increasing competition from cable and satellite services, the share of viewers won in the first half rose 2 per cent year-on- year while the ITV network average fell by 2 per cent.
STV's share of the losses of GMTV, the network breakfast time service in which it has a 20 per cent stake, fell from pounds 1m to pounds 200,000. Andrew Flanagan, STV's finance director, said it was hoped GMTV would break even next year.
A spokesman for Mirror Group Newspapers, which has a 28 per cent stake in Newspaper Publishing, owner of the Independent, said: 'We are assured of the scope for recovery and are very happy with the price of 520p we paid for the shares.'Reuse content