Half Year 2026 STV Group PLC Earnings Call

September 8, 2026

Speaker #1: I think we could drift this in the next minute.

Ange Wilson: I think we are good, Rufus, in the next minute.

Rufus Radcliffe: Would you like me to leave it a minute, Ange?

Speaker #2: She—would you like me to leave it a minute, and...?

Speaker #1: Yeah, I think we can kick off, and we can let people in as they come, but we've got the majority, so yeah, I would say—

Ange Wilson: Yeah, I think we can kick off, and we can let people in as we come in, but we have got majority, so yeah.

Ange Wilson: Okay.

Rufus Radcliffe: Okay.

Ange Wilson: I would say.

Speaker #2: Okay, well, let's get started then. Hi everyone, thank you very much for joining us for our 2026 interim results. I will start with an overview, followed by the financial highlights from Lindsay, and then I'll do the strategic update and summary, followed by Q&A.

Rufus Radcliffe: Well, let's get started then. Hi, everyone. Thank you very much for joining us for our 2026 interim results. I will start with an overview, followed by the financial highlights from Lindsey, and then I will do the strategic update and summary, followed by Q&A. Our H1 performance was in line with expectations. Despite a difficult external environment, the audience division performed strongly. We successfully launched STV Radio and the growth in higher margin advertising revenue, the benefit of the World Cup, and cost savings helped offset the impact of significantly lower activity in Studios. The prolonged commissioning slowdown has also resulted in a non-cash impairment charge in Studios. This reflects a more cautious assessment of current market conditions and future cash flows. Advertising visibility remains limited, commissioning decisions remain slow, and we are continuing to prioritize financial flexibility.

Rufus Radcliffe: Well, let's get started then. Hi, everyone. Thank you very much for joining us for our 2026 interim results. I will start with an overview, followed by the financial highlights from Lindsay, and then I will do the strategic update and summary, followed by Q&A. Our H1 performance was in line with expectations. Despite a difficult external environment, the audience division performed strongly. We successfully launched STV Radio and the growth in higher margin advertising revenue, the benefit of the World Cup, and cost savings helped offset the impact of significantly lower activity in Studios. The prolonged commissioning slowdown has also resulted in a non-cash impairment charge in Studios. This reflects a more cautious assessment of current market conditions and future cash flows. Advertising visibility remains limited, commissioning decisions remain slow, and we are continuing to prioritize financial flexibility.

Speaker #2: Our first-half performance was in line with expectations. Despite a difficult external environment, the Audience division performed strongly. We successfully launched STV Radio, and the growth in higher-margin advertising revenue, the benefit of the World Cup, and cost savings helped offset the impact of significantly lower activity in Studios.

Speaker #2: The prolonged commissioning slowdown has also resulted in a non-cash impairment charge in Studios. This reflects a more cautious assessment of current market conditions and future cash flows.

Speaker #2: Advertising visibility remains limited, commissioning decisions remain slow, and we are continuing to prioritize financial flexibility. Q3 total advertising revenue is forecast to be down 5%, and no interim dividend is proposed.

Rufus Radcliffe: Q3 total advertising revenue is forecast to be down 5%, and no interim dividend is proposed. However, we are focused on the areas we can control. We have taken decisive action on costs and cash generation. STV remains a strong and increasingly diversified business with market-leading audience brands, a proven track record in content creation, and multiple avenues for future growth. We are positioning the business not for a return to the market of the past, but for the opportunities we see in the market tomorrow. Now over to Lindsey.

Speaker #2: However, we are focused on the areas we can control. We have taken decisive action on costs and cash generation. STV remains a strong and increasingly diversified business, with market-leading audience brands, a proven track record in content creation, and multiple avenues for future growth.

Speaker #2: We are positioning the business not for a return to the market of the past, but for the opportunities we see in the market of tomorrow.

Speaker #2: And now, over to Lindsay.

Speaker #3: Thanks, Rufus. I'll kick off with a summary of the key financials for the first half, which are in line with the trading update that we issued in early June.

Lindsay Dixon: Thanks, Rufus. I will kick off with a summary of the key financials for the H1, which are in line with the trading update that we issued in early June. The group generated revenue of GBP 66 million in the H1 of the year, down 27% on the prior year. Within this, total advertising revenue was GBP 48 million, up 5% and driven by a strong national ad market performance around the World Cup. Studios revenues were lower than the H1 last year, with H1 2025, including significant revenues in relation to scripted programs that don't tend to recur in consecutive periods. The commissioning market also remains subdued, with even greenlight processes for returning series protracted. The regional advertising market also benefited from the World Cup, albeit to a lesser extent in pound terms, but saw much tougher underlying conditions than national for the first time in a while.

Speaker #3: The group generated revenue of £66 million in the first half of the year, down 27% on the prior year. Within this, total advertising revenue was £48 million, up 5%, and driven by a strong national ad market performance around the World Cup.

Speaker #3: Studios revenues were lower than the first half last year, with H1 2025 including significant revenues in relation to scripted programs that don't tend to occur in consecutive periods.

Speaker #3: The commissioning market also remains subdued, with even greenlight processes for returning series protracted. The regional advertising market also benefited from the World Cup, albeit to a lesser extent in pound terms, but saw much tougher underlying conditions than national for the first time in a while.

Speaker #3: Digital revenues grew 13% to just over £12 million, and include the first contribution from STV Radio, which has gotten off to a strong start.

Lindsay Dixon: Digital revenues grew 13% to just over GBP 12 million and include the first contribution from STV Radio, which has gotten off to a strong start. Adjusted operating profit at GBP 5.9 million was down 12% on the prior year, with an improved operating margin of 9%. Adjusted EPS at 7.1 pence per share was in line with the prior year as a result of higher losses attributable to minority shareholders and certain production labels. Total net debt at just under GBP 43 million was down on the start of the year, well within our facility limit of GBP 75 million, and with key financial covenants also with significant headroom. Moving to the group P&L, there are a few points to highlight. Profitability in the audience division was up 21% on the H1 of last year, benefiting from those high-margin World Cup ad revs.

Speaker #3: Adjusted operating profit, at £5.9 million, was down 12% on the prior year, with an improved operating margin of 9%. Adjusted EPS, at 7.1 pence per share, was in line with the prior year, as a result of higher losses attributable to minority shareholders in certain production labels.

Speaker #3: Total net debt, at just under £43 million, was down on the start of the year, well within our facility limit of £75 million, and with key financial covenants also with significant headroom.

Speaker #3: Moving to the group P&L, there are a few points to highlight. Profitability in the Audience Division was up 21% on the first half of last year, benefiting from those high-margin World Cup ad revenues.

Speaker #3: This profit performance also reflects the impact of successful execution of our restructuring program announced in September last year. You can also see cost savings coming through as a reduction in corporate costs.

Lindsay Dixon: This profit performance also reflects the impact of successful execution of our restructuring program announced in September last year, and you can also see cost savings coming through as a reduction in corporate costs. The Studios loss of GBP 3.2 million is in line with our guidance in June and reflects the current challenging and evolving commissioning market. These market conditions have impacted the short to medium-term outlook for the business through slower decision-making on commissions across the board, less security on over-advanced development for soft greenlight projects, and higher levels of competition for a limited number of commissioning slots. As a result, we have recognized a non-cash impairment of GBP 25 million in the H1 of the year, the largest element of which is a goodwill impairment of GBP 17 million. A full breakdown of the adjusting items is included in the appendices.

Speaker #3: The studio's loss of £3.2 million is in line with our guidance in June and reflects the current challenging and evolving commissioning market. These market conditions have impacted the short-to-medium-term outlook for the business through slower decision-making on commissions across the board, less security on over-advanced developments or soft greenlit projects, and higher levels of competition for a limited number of commissioning slots.

Speaker #3: As a result, we've recognized a non-cash impairment of £25 million in the first half of the year, the largest element of which is a goodwill impairment of £17 million.

Speaker #3: A full breakdown of the adjusting items is included in the appendices. Finance costs are down year-on-year because of timing differences on unrealized FX gains and losses in the prior year.

Lindsay Dixon: Finance costs are down year on year because of timing differences on unrealized FX gains and losses in the prior year. Our interest on borrowings, which is the largest part of the balance, is the same as last year at GBP 1.8 million. Turning to advertising revenue, the table on the left shows the performance of each main advertising revenue category in Q1 and Q2 this year, and you can see the contrast in year-on-year comparators in Q2, driven by the World Cup in June. When we spoke to you back in March, we talked about the strength of the World Cup and the boost that it would be for advertising markets. What we did not know at the time was whether it would be a positive stimulus for a wider recovery or whether macro factors would persist and conditions post the tournament would return to Q1 levels.

Speaker #3: Our interest on borrowings, which is the largest part of the balance, is the same as last year at £1.8 million. Turning to advertising revenue, the table on the left shows the performance of each main advertising revenue category in Q1 and Q2 this year, and you can see the contrast in year-on-year comparators in Q2, driven by the World Cup in June.

Speaker #3: When we spoke to you back in March, we talked about the strength of the World Cup and the boost that it would be for advertising markets.

Speaker #3: What we didn't know at the time was whether it would be a positive stimulus for a wider recovery, or whether macro factors would persist and conditions post-tournament would return to Q1 levels.

Speaker #3: While we have very limited visibility, our Q3 guidance for TAR is down around 5%, and so this would suggest that a wider recovery is not yet with us.

Lindsay Dixon: While we have very limited visibility, our Q3 guidance for TAR is down around 5%, and so this would suggest that a wider recovery is not yet with us. In terms of individual category performance, regional is a bit of a standout as it has performed better than national for many years, driven by the success of the STV Growth Fund. It is definitely a tougher market at the minute, not in terms of fewer brands advertising with us, but in total campaign spend, which has been pulled back given broader uncertainty. This next chart shows the main moving parts in adjusted operating profit year on year. Most of these I have already mentioned, but a couple of points are worth picking out. The first is the radio performance, which is in line with our business plan.

Speaker #3: In terms of individual category performance, regional is a bit of a standout, as it’s performed better than national for many years, driven by the success of the STV Growth Fund.

Speaker #3: It's definitely a tougher market at the minute, not in terms of fewer brands advertising with us, but in total campaign spend, which has been pulled back given broader uncertainty.

Speaker #3: This next chart shows the main moving parts in adjusted operating profit year-on-year. Most of these have already been mentioned, but a couple of points are worth picking out.

Speaker #3: The first is the radio performance, which is in line with our business plan. The loss in the first half of the year is because we couldn't appoint national sales representation until our first RAJAR listening numbers were published.

Lindsay Dixon: The loss in the H1 of the year is because we could not appoint national sales representation until our first RAJAR listening numbers were published. Our debut RAJAR hours were released in early August and were ahead of expectations. They are a great go-to-market for Bauer, our recently appointed national agent. I would then highlight the impact that the mix of scripted and unscripted programming can have on profitability in the Studios business, where we had a couple of streamer dramas last year, but not this year. While we have talked a lot about the challenges in the market and specifically unscripted before, it is good to see that our overall unscripted profitability has improved a little year on year, as we continue to seek efficiencies and ensure our portfolio is best placed to see soft to the market.

Speaker #3: Our debut radar hours were released in early August and were ahead of expectations. They're a great go-to-market for Bauer, our recently appointed national agent.

Speaker #3: I'd then highlight the impact that the mix of scripted and unscripted programming can have on profitability in the studios business, where we had a couple of streamer dramas last year, but not this year.

Speaker #3: And while we've talked a lot about the challenges in the market, and specifically unscripted before, it's good to see that our overall unscripted profitability has improved a little year-on-year, as we continue to seek efficiencies and ensure our portfolio is best placed to face off to the market.

Speaker #3: I'd also highlight the cost savings bar, which shows the improved profitability from the restructuring program we implemented in Q4, as well as other savings.

Lindsay Dixon: I'd also pull out the cost savings bar, which shows the improved profitability from the restructuring program we implemented in Q4, as well as other savings. In terms of that restructuring program, this was group-wide, with around 60 people leaving from across the business. Our core principle was to seek savings and efficiencies without damaging our core operations, and we believe we've achieved this. Savings associated with the changes to our news commitments approved by Ofcom in H1 will start to come through in H2 of the year, following the launch of our new STV News at Six in July. Turning to cash and net debt, the group's total net debt at the end of June was just under GBP 43 million, and equivalent to leverage of 2.4 times. Interest cover was 5.5 times, with both metrics well within their covenant limits.

Speaker #3: And in terms of that restructuring program, this was group-wide, with around 60 people leaving from across the business. Our core principle was to seek savings and efficiencies without damaging our core operations, and we believe we've achieved this.

Speaker #3: Savings associated with the changes to our news commitments approved by Ofcom in the first half will start to come through in the second half of the year, following the launch of our new STV News at 6 in July.

Speaker #3: Turning to cash and net debt, the group's total net debt at the end of June was just under £43 million, equivalent to a leverage of 2.4 times.

Speaker #3: Interest cover was 5.5 times, with both metrics well within their covenant limits. Production financing loans have been repaid during the period, as cash has been collected from commissioners and tax credits received.

Lindsay Dixon: Production financing loans have been repaid during the period as cash has been collected from commissioners and tax credits received. The loan amounts drawn down at the end of June are for new facilities rather than amounts outstanding on those in place previously. We expect net debt to remain at or around this level at the year-end and are guiding to a range of GBP 40 to GBP 45 million. On pensions, we continue to see the accounting deficit reduce. Our next triennial valuation is due at the end of December, and we've had early discussions with the trustees to rebalance the schedule of contributions to alleviate pressure on cash during 2027. Our previous schedule of contributions assumed a catch-up payment of GBP 21 million across 2027, which we've now evenly phased over the remainder of the recovery plan.

Speaker #3: The loan amounts drawn down at the end of June are for new facilities, rather than amounts outstanding on those in place previously. We expect net debt to remain at or around this level at the year end, and we are guiding to a range of £40 to £45 million.

Speaker #3: On pensions, we continue to see the accounting deficit reduce. Our next triennial valuation is due at the end of December, and we've had early discussions with the trustees to rebalance the schedule of contributions to alleviate pressure on cash during 2027.

Speaker #3: Our previous schedule of contributions assumed a catch-up payment of £21 million across 2027, which we've now evenly phased over the remainder of the recovery plan.

Speaker #3: Our new profile of contributions sees us pay £8 million in December 2027 and £10 million per annum thereafter to the end of December 2031, a short extension to the recovery plan of one year.

Lindsay Dixon: Our new profile of contributions sees us pay GBP 8 million in December 2027 and GBP 10 million per annum thereafter to the end of December 2031, a short extension to the recovery plan of one year. This last slide looks to pull all the guidance together onto a page. Most of it you've heard in the last 10 minutes, but it's worthwhile pausing to talk about our Studios guidance for this year and next. There are a small number of key significant commissioning decisions that have been delayed this year, with a resultant impact on overall profitability for the division. We expect the division to be profitable in H2 of the year, as it usually is, but our full-year expectations are now for a break-even position.

Speaker #3: And this last slide looks to pull all the guidance together onto a page. Most of it you've heard in the last ten minutes, but it's worthwhile pausing to talk about our studios guidance for this year and next.

Speaker #3: There are a small number of key, significant commissioning decisions that have been delayed this year, with a resultant impact on overall profitability for the division.

Speaker #3: We expect the division to be profitable in the second half of the year, as it usually is, but our full-year expectations are now for a break-even position.

Speaker #3: Looking ahead to 2027, profits are subject to the timing and ultimate decision of a small number of individually material commissions, each of which could have a meaningful impact on the outcome for the year.

Lindsay Dixon: Looking ahead to 2027, profits are subject to the timing and ultimate decision of a small number of individually material commissions, each of which could have a meaningful impact on the outturn for the year. I'll now hand back to Rufus to take you through the strategy update and outlook.

Speaker #3: I'll now hand back to Rufus to take you through the strategy update and outlook.

Speaker #1: Thank you very much, Lindsay. So now, having taken you through the financial performance, I want to focus on how we are responding. We are not assuming that existing markets will simply recover.

Rufus Radcliffe: Thank you very much, Lindsey. So now, having taken you through the financial performance, I want to focus on how we are responding. We are not assuming that existing markets simply recover. We are adapting the business to the environment we face, scaling areas showing momentum, and remaining disciplined about where we allocate capital. On this slide, you can see the organizing principles for our strategy, providing clear direction while allowing us to respond to an evolving market. Firstly, in our Audience division, we are maximizing reach and engagement across broadcast, streaming, news, audio, and social. This gives us a wider audience footprint and broader proposition for advertisers. In Studios, we are focusing the portfolio on the areas with the strongest prospects in the market, returnable IP, international customers, and selected digital-first opportunities. Thirdly, across the business, we are aligning our cost base and capabilities with our priorities.

Rufus Radcliffe: Thank you very much, Lindsay. So now, having taken you through the financial performance, I want to focus on how we are responding. We are not assuming that existing markets simply recover. We are adapting the business to the environment we face, scaling areas showing momentum, and remaining disciplined about where we allocate capital. On this slide, you can see the organizing principles for our strategy, providing clear direction while allowing us to respond to an evolving market. Firstly, in our Audience division, we are maximizing reach and engagement across broadcast, streaming, news, audio, and social. This gives us a wider audience footprint and broader proposition for advertisers. In Studios, we are focusing the portfolio on the areas with the strongest prospects in the market, returnable IP, international customers, and selected digital-first opportunities. Thirdly, across the business, we are aligning our cost base and capabilities with our priorities.

Speaker #1: We are adapting the business to the environment we face, scaling areas showing momentum and remaining disciplined about where we allocate capital. On this slide, you can see the organizing principles for our strategy, providing clear direction while allowing us to respond to an evolving market.

Speaker #1: Firstly, in our audience division, we are maximizing reach and engagement across broadcast, streaming, news, audio, and social. This gives us a wider audience footprint and a broader proposition for advertisers.

Speaker #1: And in Studios, we are focusing the portfolio on the areas with the strongest prospects in the market: returnable IP, international customers, and selected digital-first opportunities.

Speaker #1: And thirdly, across the business, we are aligning our cost base and capabilities with our priorities. This is about building a broader business while protecting cash, improving returns, and preserving our ability to invest.

Rufus Radcliffe: This is about building a broader business while protecting cash, improving returns, and preserving our ability to invest. STV continues to be Scotland's leading platform for audiences. We delivered 99% of the top 500 commercial audiences in the H1 of the year. STV Player had its best six months ever, with more than 40 million hours of content watched on the service. The World Cup was huge. 3 million Scots watched across STV and STV Player, generating more than 39 million viewing hours, peaking with Scotland's game against Morocco. This matters commercially. In an increasingly fragmented media market, STV still brings large-scaled audiences together whilst also allowing viewers to watch in a way that suits them. Now to STV Radio. On this slide, a quick reminder of the strategic rationale for launching the service. The rationale was simple. Radio is highly complementary to television.

Speaker #1: STV continues to be Scotland's leading platform for audiences. We delivered 99% of the top 500 commercial audiences in the first half of the year, and STV Player had its best six months ever, with more than 40 million hours of content watched on the service.

Speaker #1: The World Cup was huge. Three million Scots watched across STV and STV Player, generating more than 39 million viewing hours, peaking with Scotland's game against Morocco.

Speaker #1: And this matters commercially. In an increasingly fragmented media market, STV still brings large, scaled audiences together, while also allowing viewers to watch in a way that suits them.

Speaker #1: And now to STV Radio. On this slide, a quick reminder of the strategic rationale for launching the service. The rationale was simple: radio is highly complementary to television.

Speaker #1: It allows us to reach audiences at different points in the day, while filling a clear gap in the market for Scotland's only national commercial radio station, produced in Scotland for Scottish audiences.

Rufus Radcliffe: It allows us to reach audiences at different points in the day, while filling a clear gap in the market for Scotland's only national commercial radio station produced in Scotland for Scottish audiences. TV is also highly complementary for advertisers, but more of that to follow. The stations got off to a strong start. After only six months on air, it is reaching 139,000 weekly listeners and has already become a top 10 commercial station in Scotland. The 9.3 hours of average weekly listening is particularly encouraging because it shows that we already have a substantial, loyal audience. Radio gives us another way to reach Scottish audiences, expands the inventory we can offer to advertisers, and also creates opportunities to develop content across audio, TV, social, and digital. Our STV Radio Football Podcast has already amassed 21 million video views.

Speaker #1: TV is also highly complementary for advertisers, but more of that to follow. The station's got off to a strong start. After only six months on air, it is reaching 139,000 weekly listeners and has already become a top 10 commercial station in Scotland.

Speaker #1: The 9.3 hours of average weekly listening is particularly encouraging because it shows that we already have a substantial, loyal audience. Radio gives us another way to reach Scottish audiences, expands the inventory we can offer to advertisers, and also creates opportunities to develop content across audio, TV, social, and digital.

Speaker #1: Our STV Radio Football podcast has already amassed 21 million video views. We've had 20 million video views of STV Radio content on our social channels.

Rufus Radcliffe: We've had 20 million video views of STV Radio content on our social channels, and there's also now a dedicated STV Radio Football Takeover show on STV every Friday night. It is still early, and our focus is on growing awareness and increasing reach, but we are ahead of plan and pleased with where we are at. You can see here the impact of our diversification on audience reach in this snapshot from April of this year. On the left-hand side of this slide, you can see amongst all adults, STV and STV Player combined reached 71% of people in Scotland. This figure increases to 77% when you add in radio, digital news, and social platforms. On the right-hand side, when you look at under 45s, the impact is even more significant, with reach increasing by around 10 percentage points.

Speaker #1: And there's also now a dedicated STV Radio Football Takeover show on STV every Friday night. It is still early, and our focus is on growing awareness and increasing reach, but we are ahead of plan and pleased with where we are at.

Speaker #1: You can see here the impact of our diversification on audience reach. In this snapshot from April of this year, on the left-hand side of this slide, you can see that, amongst all adults, STV and STV Player combined reached 71% of people in Scotland.

Speaker #1: But this figure increases to 77% when you add in radio, digital news, and social platforms. And on the right-hand side, when you look at under-45s, the impact is even more significant.

Speaker #1: We've reached an increase of around 10 percentage points. We are focused on protecting the reach we have today, but also ensuring that STV remains relevant to younger, multi-platform audiences in the future.

Rufus Radcliffe: We are focused on protecting the reach we have today, but also ensuring that STV remains relevant to younger multi-platform audiences in the future. Now to news. We were granted permission by Ofcom to update our news licenses requirements for the first time in 20 years and rolled out our new 6:00 PM programs on 13 July. It has gone well, with share and volume of viewing both up since we implemented the changes. The changes have also allowed us to put news on a sustainable cost footing, but importantly, also allows us to scale up our digital news proposition. We have been doing this throughout the H1 of the year with digital video views up 31% year on year, helped by some amazing stories of the Tartan Army in Boston during the World Cup.

Speaker #1: Now to news. We were granted permission by Ofcom to update our news licence requirements for the first time in 20 years, and rolled out our new 6:00 p.m.

Speaker #1: Programs on the 13th of July. It has gone well, with share and volume of viewing both up since we implemented the changes. The changes have also allowed us to put news on a sustainable cost footing, but, importantly, also allow us to scale up our digital news proposition.

Speaker #1: We've been doing this throughout the first half of the year, with digital video views up 31% year-on-year, helped by some amazing stories of the Tartan Army in Boston during the World Cup.

Speaker #1: So not only is STV Scotland's leading platform for audiences, but that is also why we are Scotland's leading platform for advertisers. And we now have more ways than ever to talk to advertisers now have more ways than ever to talk to their customers through STV.

Rufus Radcliffe: Not only is STV Scotland's leading platform for audiences, but that is also why we are Scotland's leading platform for advertisers, and advertisers now have more ways than ever to talk to their customers through STV. Not only do we have an ever-growing range of advertising products, but all the evidence is that TV remains the most effective advertising platform, which, when combined with radio, increases effectiveness by a further 20%. Effectiveness ultimately is every advertiser's number one KPI. You can see that some of our new ad products have had a strong market reaction. We have 25 active brands using pause ads, which are served when a viewer presses pause on STV Player. We have 37 active brands on STV Radio.

Speaker #1: Not only do we have an ever-growing range of advertising products, but all the evidence is that TV remains the most effective advertising platform, which, when combined with radio, increases effectiveness by a further 20%.

Speaker #1: And effectiveness ultimately is every advertiser's number one KPI. You can see that some of our new ad products have had a strong market reaction.

Speaker #1: We have 25 active brands using Pause ads, which are served when a viewer presses pause on STV Player. And we have 37 active brands on STV Radio.

Speaker #1: And I'm particularly pleased that 10 of those have never advertised with STV before, encouraged now by the lower STV Radio price point, unlocking a new part of the market.

Rufus Radcliffe: I am particularly pleased that 10 of those have never advertised with STV before, encouraged now by the lower STV Radio price point, unlocking a new part of the market. We have a record 66% of brands on our register who are now using more than one STV platform. There is more to come during the H2. STV ADapt, our new AI-enabled targeted advertising, has been designed to make it easier and more cost-effective for SMEs to access targeted advertising through STV. Technical development is well advanced ahead of the planned Q4 rollout. We are also developing STV Win, our competitions proposition, which will help deepen audience engagement and is, of course, a new revenue stream as well. Now to studios. The market remains challenging, and that is reflected in today's results.

Speaker #1: And we have a record 66% of brands on our register who are now using more than one STV platform. And there's more to come during the second half.

Speaker #1: STV Adapt, our new AI-enabled targeted advertising, has been designed to make it easier and more cost-effective for SMEs to access targeted advertising through STV.

Speaker #1: Technical development is well advanced ahead of the planned Q4 rollout. We are also developing STV Win, our competition proposition, which will help deepen audience engagement and is, of course, a new revenue stream as well.

Speaker #1: And now to Studios. The market remains challenging, and that is reflected in today's results. The UK commissioning market remains well below recent levels, and decisions are taking longer across the industry.

Rufus Radcliffe: The UK commissioning market remains well below recent levels, and decisions are taking longer across the industry. At the same time, viewing continues to shift towards digital platforms, changing how content is commissioned, distributed, and monetized. That creates both challenges but also opportunities for producers, and it is reflected in our performance this year. Our response is set out on this slide. We are focusing development spend on returnable IP because successful returning brands create longer-term value. We are broadening our customer base through relationships with international buyers and streamers, and we are also building our understanding of digital-first content, giving us valuable capability and insight in a fast-growing area of the market. At the same time, we are maintaining strong discipline around costs, cash generation, and investment. We are actively reviewing the portfolio and directing resources to the opportunities with the strongest long-term potential.

Speaker #1: At the same time, viewing continues to shift toward digital platforms, changing how content is commissioned, distributed, and monetized. That creates both challenges, but also opportunities for producers, and it's reflected in our performance this year.

Speaker #1: Our response is set out on this slide. We're focusing development spend on returnable IP, because successful returning brands create longer-term value. We're broadening our customer base through relationships with international buyers and streamers, and we're also building our understanding of digital-first content, giving us valuable capability and insight in a fast-growing area of the market.

Speaker #1: At the same time, we're maintaining strong discipline around costs, cash generation, and investment. We're actively reviewing the portfolio and directing resources to the opportunities with the strongest long-term potential.

Speaker #1: There are really attractive opportunities in returnable IP, growing international customers, and digital. For now, our priority is improving performance and creating the capacity to invest more meaningfully as conditions improve.

Rufus Radcliffe: There are really attractive opportunities in returnable IP, growing international customers, and digital. For now, our priority is improving performance and creating the capacity to invest more meaningfully as conditions improve. A bit more on returnable IP, which is a clear STV Studios priority. It has helped underpin the business as market conditions continue to be challenging. This slide shows the quality of our unscripted business, where despite the difficult market backdrop, we see resilient demand for our returning brands. We have an established portfolio across entertainment and factual, and only last week, we announced the recommissions of both Bridge of Lies and Celebrity Catchphrase. Our development spend is always judged against its potential to create repeatable formats and enduring IP. Value develops as a successful program returns, scales, and creates future rights opportunities.

Speaker #1: So, a bit more on returnable IP, which is clearly a studios priority. It has helped underpin the business as market conditions continue to be challenging.

Speaker #1: This slide shows the quality of our unscripted business, where, despite the difficult market backdrop, we see resilient demand for our returning brands. We have an established portfolio across entertainment and factual, and only last week, we announced the recommissions of both Bridge of Lies and Celebrity Catchphrase.

Speaker #1: Our development spend is always judged against its potential to create repeatable formats and enduring IP. Value develops as a successful program returns, scales, and creates future rights opportunities.

Speaker #1: You'll also see on this slide, Blue Lights—one of the most popular dramas on British TV—which returns for its fourth series this autumn on BBC One and BBC iPlayer.

Rufus Radcliffe: You will also see on this slide, Blue Lights, one of the most popular dramas on British TV, which returns for its fourth series this autumn on BBC One and BBC iPlayer. Our priority also continues to be to broaden our customer base beyond UK commissioning, and we have made real progress. The Witness was our first drama for Netflix and was the most-streamed drama in the world for 2 weeks in June on the service. In fact, it was the most-streamed program in the world on that service, demonstrating the ability for our content to connect with audiences internationally. Primal Media, one of our labels, has secured its first commission for Disney's Hulu, giving us another relationship with a global buyer.

Speaker #1: Our priority also continues to be to broaden our customer base beyond UK commissioning, and we have made real progress. The Witness was our first drama for Netflix and was the most streamed drama in the world for two weeks in June on the service.

Speaker #1: In fact, it was the most streamed program in the world on that service, demonstrating the ability for our content to connect with audiences internationally.

Speaker #1: Primal Media, one of our labels, has secured its first commission for Disney's Hulu, giving us another relationship with a global buyer. And our partnership with Kevin McKidd, one of the stars of Grey's Anatomy, under the Ferryman Films label, strengthens the scripted pipeline and gives us access to distinctive creative talent with a truly global profile.

Rufus Radcliffe: Our partnership with Kevin McKidd, one of the stars of Grey's Anatomy, under the Ferryman Films label, strengthens the scripted pipeline and gives us access to distinctive creative talent with a truly global profile. These successes do not remove the near-term market pressure, and we should not imply that they do, but they demonstrate that STV Studios has creative capability, relationships, and IP that can compete beyond the UK market. Our task is to turn that creative progress into more consistent financial performance. The third focus is on digital-first content. This is clearly an important and growing part of the media market, but our approach needs to be disciplined and proportionate to our financial capacity. Fan Club, a specialist ad-funded branded content business in which we took a minority stake last year, has helped us build capability, understand platform economics, and develop relationships in the creator economy.

Speaker #1: These successes do not remove the near-term market pressure, and we should not imply that they do, but they demonstrate that STV Studios has the creative capability, relationships, and IP that can compete beyond the UK market.

Speaker #1: Our task is to turn that creative progress into more consistent financial performance. And the third focus is on digital-first content. This is clearly an important and growing part of the media market, but our approach needs to be disciplined and proportionate to our financial capacity.

Speaker #1: Fan Club, a specialist ad-funded branded content business in which we took a minority stake last year, has helped us build capability, understand platform economics, and develop relationships in the creator economy.

Speaker #1: We are testing where existing STV Studios IP, talent, and genre expertise can translate effectively into digital-first formats and audiences. You can see examples of early activity on this slide, building a YouTube community around Game of Wall called Let's Go Knitting.

Rufus Radcliffe: We are testing where existing STV Studios IP, talent, and genre expertise can translate effectively into digital-first formats and audiences. You can see examples of early activity on this slide, building a YouTube community around Game of Wool called Let's Get Knitting. Rockerdale Studios, the makers of The Assembly, recently announced a new YouTube proposition, The Assembly: B-Sides, and Fan Club have delivered some excellent early work for clients, including Vinted and Russell Hobbs. We have a high-quality STV Studios business with outstanding creative leaders and a track record of creating successful content for broadcasters and streamers. We continually review our portfolio of labels, but the scale and pace of change in the commissioning market means it is right to take a fresh look at how the portfolio is positioned for the future.

Speaker #1: Rockadale, the makers of The Assembly, recently announced a new YouTube proposition, the Assembly B-Sides. And Fan Club have delivered some excellent early work for clients, including Vinted and Russell Hobbs.

Speaker #1: We have a high-quality Studios business with outstanding creative leaders and a track record of creating successful content for broadcasters and streamers. We continually review our portfolio of labels, but the scale and pace of change in the commissioning market means it's right to take a fresh look at how the portfolio is positioned for the future.

Speaker #1: The objective is a stronger, more focused Studios business that is aligned with where the market is moving, while retaining the creative breadth that has been a longstanding strength of the portfolio.

Rufus Radcliffe: The objective is a stronger, more focused Studios business that is aligned with where the market is moving while retaining the creative breadth that has been a long-standing strength of the portfolio. Bringing the story together, STV is becoming a broader, more diversified business. In the Audience division, we have market-leading reach in Scotland, strong streaming growth, trusted news service, and a promising and growing audio proposition with an increasingly broad proposition for our advertisers. In Studios, we have a production label portfolio with some of the industry's most admired creative leaders with established returnable IP, strong scripted capability, and growing relationships with international buyers. We are also clear that we must adapt to a more difficult commissioning market as well as move into the digital creator space with discipline. Our priorities are clear.

Speaker #1: So, bringing the story together, STV is becoming a broader, more diversified business. In the audience division, we have market-leading reach in Scotland, strong streaming growth, a trusted news service, and a promising and growing audio proposition, with an increasingly broad offering for our advertisers.

Speaker #1: In Studios, we have a production label portfolio with some of the industry's most admired creative leaders, established returnable IP, strong scripted capability, and growing relationships with international buyers.

Speaker #1: But we are also clear that we must adapt to a more difficult commissioning market, as well as move into the digital creator space with discipline.

Speaker #1: Our priorities are clear: deliver the audience growth initiatives already underway, reshape studios around the areas where we can win, and protect cash and balance sheet flexibility.

Rufus Radcliffe: Deliver the audience growth initiatives already underway, reshape Studios around the areas where we can win, protect cash and balance sheet flexibility. Whilst we remain cautious about the near-term outlook, we are confident that the actions we are taking will give us greater resilience and more opportunities to create longer-term value. Lindsay and I are very happy to answer any questions you may have. If you wouldn't mind as well, if you could just introduce yourself as you ask the question, that would be very helpful. Thank you very much. Who wants to go first?

Speaker #1: While we remain cautious about the near-term outlook, we are confident that the actions we are taking will give us greater resilience and more opportunities to create longer-term value.

Speaker #1: And now, Lindsay and I are very happy to answer any questions you may have. If you wouldn't mind as well, if you could just introduce yourself as you ask a question, that would be very helpful.

Speaker #1: Thank you very much.

Speaker #2: Who wants to go first?

Speaker #3: I'll have to go first. I'm sure I need to find a 'raised hand' button.

Andrew Renton: I'll actually go first. I'm struggling to find a raise hand button.

Andy Renton: I'll actually go first. I'm struggling to find a raise hand button.

Speaker #2: Hi, Andy.

Rufus Radcliffe: Hi, Andy.

Speaker #3: Yes, Andy Renton from Cavendish. So, a couple of questions from me. Just on the picking where you can win in studios—could you just give a bit more detail on where you see that between scripted and unscripted?

Andrew Renton: Yes, Andrew Renton from Cavendish. A couple questions for me. Just on the picking where you can win in Studios, could you just give a bit more detail on where you see that between scripted and unscripted? On STV ADapt, how much of that work, which is obviously tailored more towards SMEs, how much do you think you can use increased efficiency for larger clients as well?

Andy Renton: Yes, AAndy Renton from Cavendish. A couple questions for me. Just on the picking where you can win in Studios, could you just give a bit more detail on where you see that between scripted and unscripted? On STV ADapt, how much of that work, which is obviously tailored more towards SMEs, how much do you think you can use increased efficiency for larger clients as well?

Speaker #3: And then, on STV Adapt, how much of that work—which is obviously sort of tailored more towards SMEs—but how much of that do you think you can use to increase efficiency for larger clients as well?

Speaker #2: Yeah. Okay, thanks, Andy. So in Studios, as we've said, the commissioning market is slow and decision-making is taking longer. But we have some of the most admired creative leaders in the industry, with fantastic relationships.

Rufus Radcliffe: Yeah. Okay. Thanks, Andy. In Studios, as we've said, the commissioning market is slow and decision-making is taking longer. But we have some of the most admired creative leaders in the industry with fantastic relationships. So when conditions get easier, we are confident in the leaders that we have and where we are as a business. In terms of scripted, we've had some real success. We've had "Blue Lights" season 4 is launching imminently on BBC One. We've obviously had the second series of "Criminal Record," and we are also in production with a brand-new drama through Two Cities Television as well, called "The Yank." We were extraordinarily encouraged by the response of "The Witness" launching on Netflix earlier this year. To be the most watched program on the service across the entire world in June last year proves that we can deliver for UK audiences and internationally.

Speaker #2: So, when conditions get easier, we are confident in the leaders that we have and where we are as a business. In terms of scripted, we've had some real success.

Speaker #2: We've had Blue Lights season four, which is launching imminently on BBC One. We've obviously had the second series of Criminal Record, and we are also in production with a brand new drama through Two Cities Television as well, called The Yank.

Speaker #2: And we were extraordinarily encouraged by the response to The Witness launching on Netflix earlier this year—being the most-watched program on the service across the entire world in June last year—which proved that we can deliver for UK audiences and internationally.

Speaker #2: The unscripted part of the market is tough, but the Studios division is fortunate enough to have a really strong portfolio of returning brands.

Rufus Radcliffe: The unscripted part of the market is tough, but the Studios division is fortunate enough to have a really strong portfolio of returning brands. What we are finding in the commissioning market is that whilst commissioners remain cautious, what they tend to do is gravitate to returning brands. So the fact that we've got returning series of "Antiques Road Trip," "Bridge of Lies," "The Hit List," to name but three, means we have a degree of resilience in the unscripted business, which will allow us to see through these tough market conditions at the moment. We are not assuming at the moment a big bounce back in full year 2027. We remain cautious about it, but we do see enduring strength both in unscripted and in scripted division. I think the final point to make around that is around the digital opportunities.

Speaker #2: And what we are finding in the commissioning market is that, whilst commissioners remain cautious, what they tend to do is gravitate towards returning brands.

Speaker #2: So, the fact that we've got returning series of Antiques Road Trip, Bridge of Lies, The Hit List, to name but three, means that we have a degree of resilience in the unscripted business, which will allow us to see through these tough market conditions at the moment.

Speaker #2: We are not assuming at the moment a big bounce back in full year '27. We remain cautious about it, but we do see enduring strength both in the unscripted and in the scripted divisions.

Speaker #2: And I think the final point to make around that is around the digital opportunities. We are being cautious about that, and we're not going to make a big, large-scale bet. But we took a minority investment in Fan Club last year, which has given us exposure to the creator economy, to branded content, and to better understand the platform economics.

Rufus Radcliffe: We are being cautious about that, and we're not going to make a big, large-scale bet. But we took a minority investment in Fan Club last year, which has given us exposure to the creative economy, to branded content, and to better understand the platform economics. You'll have seen a couple of the examples of the work that we're doing in the digital space now, and that is really giving us a serious understanding of the market and creating opportunities for future growth when the market is right there. In terms of the audience division, STV ADapt is primarily delivering for SMEs, because what it is, it is giving a much more hyper-targeted postcode-level targeting capability. The platform that we are building for STV ADapt is a self-serve platform.

Speaker #2: And you'll have seen a couple of the examples of the work that we're doing in the digital space now, and that is really giving us a serious understanding of the market and creating opportunities for future growth when the market is right there.

Speaker #2: And in terms of the audience division, STV Adapt is primarily delivering for SMEs, because what it is, it is giving a much more hyper-targeted, postcode-level targeting capability.

Speaker #2: The platform that we are building for STV Adapt is a self-serve platform. So a potential customer can go online, enter their campaign details, their brand assets, and their marketing line, and then AI will generate the creative for them.

Rufus Radcliffe: A potential customer can go online, can put their campaign details, their brand assets, their marketing line, and then AI will generate the creative for them. It can even generate the voiceover for them as well. It can be absolutely postcode targeted, both across linear TV and across STV Player as well. We are primarily using it to target a part of the market that we are not in at the moment, rather than asking our existing brands to move into that space. The diversification of our advertising proposition has been really strong, and we are very encouraged by the fact that 10 brands who have never advertised on STV before have used STV Radio as their entry point into our business.

Speaker #2: It can even generate the voiceover for them as well. And then it can be absolutely postcode-targeted, both across linear IP and across STV Player as well.

Speaker #2: So it is primarily—we are primarily using it to target a part of the market that we're not in at the moment, rather than asking our existing brands to move into that space.

Speaker #2: But the diversification of our advertising proposition has been really strong, and we are very encouraged by the fact that ten brands who have never advertised on STV before have used STV Radio as their entry point into our business.

Speaker #2: And obviously, we would hope that we'll be able to cross-sell them, and that they will start using a broader range of advertising products moving forward as well.

Rufus Radcliffe: We would hope that we will be able to cross-sell them, and they will start using a broader range of advertising products moving forward as well.

Speaker #3: That's really helpful, thank you. Just one follow-up question on Adapt: how will you ensure governance of the people advertising on it in that self-service model?

Andrew Renton: That is really helpful. Thank you. Just one follow-up question on STV ADapt. How will you ensure governance of the people advertising on it in that self-service model?

Andy Renton: That is really helpful. Thank you. Just one follow-up question on STV ADapt. How will you ensure governance of the people advertising on it in that self-service model?

Speaker #2: It will go through the same compliance checks that it would do on linear TV, so it will be absolutely watertight, as you would imagine.

Rufus Radcliffe: It will go through the same compliance checks that it would do on linear TV. It will be absolutely watertight, as you would imagine. It absolutely needs to be.

Speaker #2: It absolutely needs to be.

Speaker #3: Okay. Thanks.

Andrew Renton: Okay, thanks.

Andy Renton: Okay, thanks.

Speaker #2: Anyone else with any questions? I'll give it 10 more seconds, because obviously I appreciate there's always a lot to take in with these presentations, isn't there?

Rufus Radcliffe: Anyone else with any questions? I will give it 10 more seconds because obviously, I appreciate there is always a lot to take in in these presentations, is not there? No? Well, if there are no further questions. Paul Richards, we can see you for the first time. Does that mean you are about to embark on a question, or you pressed the wrong button?

Speaker #2: No? Okay. Well, if there are no further questions, our pool, Richards, you have just—we can see you for the first time. Does that mean you're about to embark on a question?

Speaker #2: Or did you press the wrong button?

Speaker #3: I pressed the wrong button, I'm afraid. Sorry about that—my apologies. Sorry.

Andrew Renton: I pressed the wrong button, I am afraid.

[Analyst]: I pressed the wrong button, I am afraid.

Rufus Radcliffe: Oh.

Andrew Renton: Sorry about that. My apologies. Sorry.

[Analyst]: Sorry about that. My apologies. Sorry.

Speaker #2: No, no problem. Very nice to see you. Anyone else? No? Okay. All right. Well, thank you very much for your time today, for joining Lindsay and me.

Rufus Radcliffe: No, no problem. Very nice to see you. Anyone else? No? Okay. All right. Well, thank you very much for your time today, for joining Lindsey and me, and we will no doubt see you all soon. Have a good day. Thank you very much. Bye for now.

Rufus Radcliffe: No, no problem. Very nice to see you. Anyone else? No? Okay. All right. Well, thank you very much for your time today, for joining Lindsay and me, and we will no doubt see you all soon. Have a good day. Thank you very much. Bye for now.

Speaker #2: And we will no doubt see you all soon. Have a good day. Thank you very much. Bye for now.

Andrew Renton: The recording has stopped.

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Half Year 2026 STV Group PLC Earnings Call

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