Shares of Glasgow-based media firm STV Group plc fell more than 20% on Monday after the company said its expectations for full year revenue and adjusted operating profit “are expected to be materially below consensus.”
In a trading update, STV said the revenue and profit warning is “a result of a further deterioration in the commissioning and advertising markets towards the end of H1 and into H2.”
STV said its 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 c.7%, with £10m of the group revenue range driven by updated Studios guidance.”
STV shares are now down about 45% for the past year to around £1.48 to give the firm a stock market value of around £69 million.
“Incremental cost savings of £750k (reflected in margin guidance above) have been identified for the full year bringing the FY25 target to £2.5m,” said STV.
“We continue to assess the cost base in its entirety and expect to provide an update on further initiatives at our interim results, with further cost savings expected to be realised in FY26.”
On its STV Studios business, the company said: “There has been significant commissioning market deterioration in late H1 and early H2 as the UK macroeconomic backdrop has worsened. This has impacted our unscripted labels with some projects in advanced development not being green-lit and some commissions being delayed to 2026.
“Our unscripted labels have delivered significant commissioning success in Q2, with 13 unscripted commissions secured, but due to the changing market conditions we have updated the phasing and timelines for future deliveries.
“Our scripted labels remain strong, and we are currently working on projects for Netflix, Apple, Sky and the BBC. There is no change to our expectations of their financial performance this year.
“STV Studios is developing an international business, but most customers remain UK-based and so the division has been disproportionately impacted by the recent slowdown in the domestic market.
“The revised full year outlook for STV Studios is for revenue in a range from £75m to £85m at an adjusted operating margin of c.4% as lower activity volumes impact fixed overhead recovery.
“The forward order book is now £54m, compared to £66m at the end of April. The reduction is a product of the slowdown in commissions won and the recognition of revenue on programmes in production.”
STV Group CEO Rufus Radcliffe said: “The deteriorating macroeconomic backdrop continues to lower business confidence impacting both markets in which we operate.
“We’re making good progress in combining and streamlining our Broadcast and Digital businesses into a new Audience division, and launch plans for the creation of our radio station are going well, with key appointments made and infrastructure plans forging ahead.
“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 H1 and into the second half of the year.
“However, in addition to winning new and repeat business in H1, 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.
“There continues to be strong long-term growth potential within our business despite the short-term challenges, and we remain laser focused on delivering on the strategic plan we outlined earlier this year.”