- Studio revenue to fall short
- Further drop in advertising
- More cost savings required
Shares in STV (STVG) fell than 25% to 141p in morning trading as the Scottish free-to-air broadcaster warned it expected full year revenue and adjusted operating profit to be ‘materially below consensus’.
The company said in a trading update ahead of its interim results in September there had been ‘a further deterioration in the commissioning and advertising markets towards the end of first half and into the second half of the year.’
It said cost savings of £750,000 have been identified for the full year bringing its total target to £2.5 million.
In a bleak trading update, the firm said third quarter TAR (total advertising revenue) would be down circa 8% with July down circa 20% and while August and September taken together would be broadly flat.
Group revenue for the full year is now expected to be in a range from £165 million to £180 million at an adjusted operating margin of circa 7%, with £10 million of the group revenue range driven by updated STV Studios guidance.
WHAT DID THE CEO SAY?
Rufus Radcliffe commented: ‘The deteriorating macroeconomic backdrop continues to lower business confidence, impacting both markets in which we operate.
‘STV Studios delivery schedule for the remainder of 2025 has been impacted by the UK commissioning market, which has further weakened at the end of the first half and into the second half of the year.
‘However, in addition to winning new and repeat business in the first half, we have completed production on key titles with international appeal, including high-end drama Amadeus for Sky and a third series of Blue Lights for BBC One, with the second series of The Fortune Hotel airing on ITV and STV this summer - and our development pipeline is strong.
‘We are proactively responding to market conditions through a combination of investing in targeted future growth initiatives aligned with our long-term strategy and identifying efficiency and cost saving opportunities across the business.’
SHORT-TERM LOSS OF MOMENTUM
Analysts at Panmure Liberum are keeping faith in the Scottish free-to-air broadcaster and see the trading update as a ‘short-term loss of momentum.’
‘The company has offset some pressure with immediate cost reductions and will guide on more in September.
‘Looking further out we would expect the commissioning market pick up again and the successful [STV] Studios business to gain the benefit as well as the expanded World Cup to provide a lift to advertising in 2026.’
