In a prelude to its interim financial results due in September, STV Group has issued a profit warning for 2025, citing worsening conditions in the UK’s advertising and commissioning markets. The company now expects both revenue and adjusted operating profit to fall significantly below market consensus. Group revenue is projected to land between £165 million and £180 million, while STV Studios alone is forecast to deliver between £75 million and £85 million, with margins under pressure due to falling activity levels.
The downturn in advertising has had a substantial impact on the company’s Audience division. While Total Advertising Revenue (TAR) rose 3% in the first half compared to 2023, expectations for the third quarter have been revised downward. July has already seen a sharp 20% drop, partly due to the comparison with last year’s Euro 2024 viewership boost. The company now anticipates Q3 TAR to decline around 8% overall, with national linear advertising expected to fall by approximately 12%. Notably, however, video-on-demand (VOD) continues to show resilience, forecast to grow 10% in Q3.
In terms of content production, STV Studios’ unscripted labels are experiencing the brunt of the market downturn. Although 13 commissions were secured in the second quarter, several projects in advanced development have either been delayed to 2026 or failed to receive the green light. This decline in new work has contributed to a reduced forward order book, now at £54 million compared to £66 million in April. The slowdown in domestic commissioning has hit STV Studios particularly hard, given that most of its clientele remains UK-based.
On a more positive note, the company’s scripted labels, including Blue Lights producer "Two Cities", continue to perform strongly. Ongoing collaborations with major platforms such as Netflix, Apple, Sky, and the BBC are providing a degree of stability within the scripted segment. Recent international productions like Amadeus for Sky and a third season of Blue Lights for BBC One reflect STV’s ability to maintain high-quality output despite domestic turbulence.
In response to these short-term challenges, STV has ramped up its cost-saving initiatives. An additional £750,000 in savings has been identified, bringing the total for fiscal year 2025 to £2.5 million. Furthermore, production financing has been halved from £10 million to £5 million over the first half of the year, thanks to successful delivery of completed programmes. The company plans to outline further efficiency measures in its upcoming results announcement.
Despite the financial headwinds, STV remains committed to its long-term strategic transformation under the “FastFwd to 2030” framework. The integration of Broadcast and Digital operations into a unified Audience division is underway, promising a more agile structure. Additionally, launch preparations for a new radio station are progressing as planned, with key personnel already appointed. CEO Rufus Radcliffe emphasized that while the macroeconomic climate remains difficult, STV is focused on executing its strategy and positioning itself for future growth.
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