STV Group H1 2025 results: revenue steady, profits lower, savings plan ramps up
STV Group has posted a resilient top line but weaker profits for the six months to 30 June 2025. Revenue was flat at £90.0m (H1 2024: £90.4m) as growth in Studios offset softer advertising. Adjusted operating profit fell 37% to £6.7m, reflecting a tougher ad market and cost inflation, partly cushioned by savings already underway. Statutory operating profit was £3.3m (down 49%), after restructuring costs within Studios.
Management is doubling down on efficiency, unveiling further cost actions and cash flexibility to ride out the downturn in advertising and commissioning. Guidance is unchanged, and the new STV Radio launch remains on track.
Key numbers at a glance
| Metric | H1 2025 | H1 2024 | Change |
|---|---|---|---|
| Revenue | £90.0m | £90.4m | Flat |
| Total advertising revenue (TAR) | £45.6m | £50.7m | -10% |
| Studios revenue | £42.2m | £37.5m | +13% |
| Adjusted operating profit | £6.7m | £10.6m | -37% |
| Statutory operating profit | £3.3m | £6.5m | -49% |
| (Loss)/profit before tax | £(0.2)m | £4.8m | n/a |
| Adjusted basic EPS | 7.1p | 15.5p | -54% |
| Statutory basic EPS | (0.1)p | 12.4p | n/a |
| Net debt (incl. production financing) | £35.7m | £28.0m | +£7.7m YoY |
| Leverage (net debt/EBITDA) | 1.6x | n/a | Covenant max 3x |
| Interim dividend | Nil | 3.9p | Suspended |
Definitions: TAR is total advertising revenue. Adjusted operating profit excludes one-off or non-cash items to show underlying performance. Leverage is net debt divided by EBITDA, used in banking covenants.
Advertising down, Studios up: the mix really mattered
TAR fell 10% to £45.6m, mainly due to a 16% drop in national linear advertising, with the prior year benefiting from Euros 2024. Versus 2023, TAR was up 3%, so the two-year trend is less harsh, but H1 2025 was still soft. The Audience division delivered £47.8m revenue (H1 2024: £52.9m) and £9.1m adjusted operating profit, with margin compressing to 19% from 23%.
Counterbalancing this, STV Studios grew revenue 13% to £42.2m despite a tougher commissioning backdrop. As usual, Studios was around breakeven in H1, with profits skewed to H2 by delivery schedules. Net-net, the stronger Studios didn’t fully offset lower advertising profitability, hence the group margin dipping to 7.4% (H1 2024: 11.7%).
Restructuring in Studios and how it shows in the numbers
Statutory results include £2.0m of restructuring costs as STV streamlined its unscripted label portfolio. Development at STV Studios Entertainment has been paused and there will be no further investment in Mighty Productions. These were largely non-cash write-offs (development stock and investment value), plus £0.1m of one-off cash costs.
Adjusted EPS was 7.1p (down from 15.5p), while statutory EPS was a small loss at (0.1)p. It is worth noting that High-End Television tax credits of £0.5m are presented within adjusting items for statutory purposes, but STV treats them as a contribution to operating costs in adjusted results to reflect how productions are financed.
Cost savings plan: another £3m a year, mostly landing in FY26
Management has launched a broader savings programme to protect profits and preserve balance sheet flexibility while ad and commissioning markets are tricky. The plan targets an additional £3m per annum of savings, with around £2.5m expected in FY26 and a cost of change of about £1m. These are incremental to the previously announced £5m run-rate target by end 2026.
Other levers include re-phasing non-essential capex over the next 18-24 months and using agreed flexibility in the 2030 pension recovery plan to shift the timing of some contributions in 2026 and 2027.
Debt, liquidity and pensions: headroom intact, flexibility increased
Net debt was £35.7m, including £5.2m of production financing, and lower than December’s £38.7m. Leverage was 1.6x against a covenant limit of 3x; interest cover stood at 7.1x. The bank facility has been increased from £70m to £75m by accessing £5m of the £20m accordion, with amended covenants to provide more headroom. There is currently £30m undrawn.
The defined benefit pension deficit narrowed to £44.4m (Dec-24: £48.3m). The recovery plan still targets October 2030, with flexibility agreed on contributions during FY26 and FY27. Cash from operations of £16.2m before interest and pensions continues to support commitments as they fall due.
Audience and STV Player: record H1 viewing, and radio is coming
STV remained the most popular peak-time channel in Scotland, delivering 96% of the top 500 commercial audiences. The STV Player posted its highest-ever H1 viewing at 37m hours, up 8% year on year. That strengthens the case for digital monetisation as viewing habits evolve.
On audio, STV Radio is progressing well: Ofcom licence granted, presenter line-up announced, and the first advertising partner (Tunnock’s) secured. This gives STV an additional commercial channel, though it will take time to scale.
Studios pipeline: 30 commissions YTD and a visible orderbook
STV Studios (including minorities) has won 30 commissions year-to-date, spanning returning series and new formats. Two Cities recently landed high-end drama Army of Shadows with Channel 4, and commissioning decisions are expected in the coming weeks across several advanced developments.
The total Studios orderbook was £40m at end-August, with £19m expected to be recognised in 2025 and the balance in 2026. In plain English: that’s contracted or near-contracted work that underpins near-term revenue visibility.
Outlook and dividend: guidance steady, interim paused
There is no change to FY25 guidance. Management still expects Q3 total advertising revenue to be down about 8%, with limited visibility and October looking similar. FY25 targets remain:
- Audience: £90m-£95m revenue, 13%-15% adjusted operating margin
- STV Studios: £75m-£85m revenue, c.4% margin
- Group: £165m-£180m revenue, c.7% margin
Given the environment, the Board is not proposing an interim dividend and will revisit at the full year. A conservative call that preserves cash while markets remain choppy.
My read: near-term pressure, medium-term options
There is no glossing over the profit drop – advertising weakness and cost inflation hit the P&L hard, and adjusted EPS halved. The additional savings and capex re-phasing are sensible countermeasures. Liquidity looks fine with £30m undrawn and covenants comfortable at 1.6x leverage.
On the positive side, Studios growth in a tough market, a solid orderbook, and record STV Player engagement all suggest the strategy is directionally right. The radio launch adds another commercial vector. The risk is that unscripted commissioning remains slow for longer and advertising visibility stays low into Q4, which could keep margins under pressure.
What I’ll be watching next
- October and Q4 advertising run-rate versus the “similar” comment for October.
- Studios commission decisions in the coming weeks and any uplift to the orderbook.
- Pace and delivery of the £3m incremental savings, and the run-rate into FY26.
- STV Player monetisation as viewing continues to hit new highs.
Overall, this is a pragmatic update: steady revenue, weaker profits, tighter costs, and ample headroom to trade through. If advertising stabilises and Studios keeps converting the pipeline, earnings should recover into H2 and FY26. For now, it’s a hold-your-nerve story rather than a victory lap.
