STV Group’s 2025: profits hit by ad slump, but digital strength and cost cuts set the tone for 2026
STV Group has posted a tough set of full-year numbers for 2025, in line with guidance after a bruising year for UK advertising and TV commissioning. Revenue fell 6% to £176.9m and adjusted operating profit dropped 44% to £11.6m, as national TV advertising remained weak and Studios margins tightened.
Management leaned hard into cost control, paused the dividend, and pushed forward on strategy: STV Player hit record viewing, new ad formats are bedding in, and the freshly launched STV Radio opens a new audience and advertiser route ahead of first RAJAR figures in August.
Headline numbers investors should know
| Metric | 2025 | 2024 | Change |
|---|---|---|---|
| Revenue | £176.9m | £188.0m | -6% |
| Total Advertising Revenue (TAR) | £89.3m | £99.7m | -10% |
| Studios revenue | £83.0m | £84.1m | -1% |
| Adjusted operating profit | £11.6m | £20.6m | -44% |
| Adjusted operating margin | 6.6% | 11.0% | -440bps |
| Statutory operating profit | £3.8m | £13.2m | -71% |
| (Loss)/profit for the year | £(4.0)m | £13.1m | n/a |
| Adjusted basic EPS | 13.1p | 29.0p | -55% |
| Statutory basic EPS | (10.8)p | 23.5p | n/a |
| Cash generated by operations | £15.5m | £17.7m | -12% |
| Net debt (excl. leases; incl. prod. finance) | £45.3m | £38.7m | +£6.6m |
| Dividend | None | 11.3p | Suspended |
Leverage was 2.5x against a covenant max of 3x, and interest cover 6.1x versus a 4x minimum. The RCF stands at £75m with a £15m accordion to February 2028 and a two-year extension option; covenant levels are temporarily relaxed from March 2026 to March 2027. The defined benefit pension accounting deficit reduced to £39.2m, with contributions in 2026 rephased into 2027.
Advertising pain: national linear down, digital holding up
TAR fell 10% to £89.3m, with national linear advertising down 16% the key headwind. Regional linear outperformed national in 2025, though STV expects regional to be down around 11% in Q1 2026 as some larger advertisers shift spend. On the brighter side, Video on Demand (VOD) revenue is guided up around 3% in Q1 2026.
Despite softer linear viewing across the industry, STV’s audience reach remained powerful. STV and STV Player reached 75% of Scots monthly (about 3.5m people), more than the ad tiers of Netflix, Prime Video and Disney+ combined. STV Player consumption hit a record 75m hours, up 9%, with Daily Active Users up 10% and watching more per person.
Commercially, the advertising product evolved: pause ads, the STV ADapt pilot seeing strong returns, and more innovation slated for 2026. The FIFA Men’s World Cup should boost Q2 demand.
Studios: resilient revenue, thinner margins, and a solid pipeline
Studios revenue slipped only 1% to £83.0m – a decent outcome in a slow commissioning market – but adjusted operating margin fell to 4.7% (2024: 7.2%), reflecting fewer format sales and pricing pressure from commissioners. The forward orderbook was £33m at December 2025 (from £40m in August), with no cancellations notified.
The slate balances returnable unscripted and high-end scripted with international appeal. Highlights included Blue Lights series 3 for BBC One, period drama Amadeus for Sky and NOW, and STV Drama’s The Witness delivered to Netflix – the label’s first commission for a global streamer. New unscripted returnables such as Game of Wool (Channel 4) and Jimmy Carr’s Am I The A****** (Comedy Central) were both recommissioned this month. Secondary sales contributed £7.3m.
Early 2026 is busy: production underway on Blue Lights 4 (BBC One), Army of Shadows (Channel 4), and Criminal Record 2 (Apple TV), all delivering in 2026. Portfolio pruning continued, with development stopped in STV Studios Entertainment and no further investment in Mighty Productions.
Cost actions, cash and covenants: the stabilisers are on
STV is targeting £8m of annualised cost savings by end FY26. Of this, £4.1m was delivered across FY24/FY25, and actions have been taken to secure the remaining £3.9m in FY26, including a restructuring programme implemented in H2 2025 (£1.7m costs recognised).
Net debt closed at £45.3m, including £2.3m of non-recourse production financing. Headroom at year-end was £19m on the RCF plus a £15m accordion. Finance costs rose to £8.8m, and the Group posted a statutory loss of £4.0m, contributing to the increase in net debt. Pension deficit payments were £10.2m in 2025, and contributions have been rephased to ease near-term cash flow.
Dividend paused: why the Board is holding fire
No final dividend is proposed for 2025 (2024: full year 11.3p). The Board cites pressure on operating margins and the current debt profile, prioritising financial flexibility as trading stabilises. The intention is to resume dividends when prudent, but no timing is disclosed.
New audience engine: STV Radio and stronger digital news
STV Radio launched on 6 January 2026 on DAB, smart speakers and STV Player, designed to broaden reach and bring new advertisers to STV. First RAJAR results land in August. Digital news consumption is surging – average monthly views across 2025 were 66m, more than double year on year – as audiences shift on-demand.
What it means for investors
- Near-term earnings pressure is clear: adjusted operating margin at 6.6% and a statutory loss underline how sensitive profits are to ad markets and Studios mix.
- Digital momentum is genuine: 75m Player hours (+9%) and 75% monthly reach across Scotland are valuable assets for advertisers, especially with new formats rolling out.
- Studios is diversified and busy into 2026, but margin rebuild is the task. The £33m orderbook and three premium dramas in production help visibility.
- Balance sheet is tight but manageable: leverage at 2.5x within covenants, with temporary covenant relaxation agreed for March 2026-27 as the business recovers.
- Dividend pause conserves cash while cost savings ramp to an £8m run-rate by end FY26.
Risks to keep on your radar
- Advertising visibility remains limited. Q1 2026 guidance is for TAR down about 5% (national linear around -7%, regional around -11%, VOD +3%). The World Cup should help Q2, but beyond that is not disclosed.
- Studios margin compression and a smaller orderbook than August put the onus on secondary sales and recommissions to support profitability.
- Debt and interest costs rose, and pension cash outflows remain material despite the lower accounting deficit.
What to watch through 2026
- Advertising trajectory by quarter, especially the scale of any World Cup boost in Q2 and how fast VOD grows.
- STV ADapt roll-out and monetisation in H2 2026, alongside continued advertiser product innovation.
- Studios deliveries: Blue Lights 4, Army of Shadows, and Criminal Record 2 – timing, revenues and margin contribution.
- RAJAR results for STV Radio in August and early advertiser uptake.
- Cost savings delivery versus plan, net debt direction, and any updates on reinstating the dividend.
Quick jargon check
- TAR: Total Advertising Revenue across linear TV and digital.
- BVoD: Broadcaster Video on Demand – a streaming service run by a broadcaster (here, STV Player).
- Forward orderbook: the value of commissioned work contracted but not yet delivered.
- Leverage: net debt divided by EBITDA, a key banking covenant.
- RAJAR: the UK’s official radio audience measurement.
Josh’s take
It’s a credible defensive performance in a year that hit both of STV’s profit engines at once. The numbers aren’t pretty, but the company has protected audience scale, grown streaming, diversified into audio, and tightened costs. If ad markets stabilise and the Studios slate delivers, 2026 should look healthier – with the World Cup as a timely tailwind.
The near-term watchouts are advertising visibility, Studios margins, and keeping leverage contained. For now, management is doing the right things: conserve cash, push digital monetisation, and deliver the pipeline. Dividend income seekers will need patience, but operationally the platform for recovery is there.
