Scotland’s STV Group has warned that its full-year financial performance will fall short of expectations due to “significant commissioning market deterioration,” with unscripted output from production arm STV Studios particularly affected by the downturn.Ahead of unveiling its interim results for the first half of 2025 in September, the Glasgow-based company today issued a trading update.STV Group said that as a result of deterioration in the UK commissioning and advertising markets in H1 and H2, predictions for full-year revenue and adjusted operating profit are expected to be “materially below consensus.”Group revenue for the full year is likely to be between £165m (US$221m) and £180m at an adjusted operating margin of about 7%.Cost savings of £750,000 have been identified, bringing the full-year target to £2.5m. Group core net debt at the end of June was £30m, compared with £29m at the end of 2024.STV Group, which operates Scottish broadcaster STV and streamer STV Player, said that total advertising revenue (TAR) for Q3 2025 is expected to be lower due to a continuing soft ad market. TAR for H1 has slumped to -10% with Q3 expected to register in the region of -8%.At STV Studio, meanwhile, the group’s unscripted production labels have been hit by a significant market downturn in late H1 and early H2, with “some projects in advanced development not being greenlit and some commissions being delayed to 2026.”However, Q2 was a successful period, with unscripted labels securing 13 commissions.STV Studio’s scripted labels “remain strong” with no change to their expected financial performances this year.The revised full-year outlook for STV Studio is for revenue between £75m and £85m at an adjusted operating margin of around 4%, as “lower activity volumes impact fixed overhead recovery.”The forward order book for STV Studio content is now £54m, compared with £66m at the end of April, with that drop a product of a commissioning downturn, the group said.The market update explained that STV Studio is attempting to build an international business but most of its clients remain UK-based – with the domestic TV industry’s contraction “disproportionately impacting” the division’s fortunes.Rufus Radcliffe, CEO of STV Group, said: “The deteriorating macroeconomic backdrop continues to lower business confidence impacting both markets in which we operate.“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.”
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