TIDMSTVG
RNS Number : 8647S
STV Group PLC
09 November 2023
9(th) November 2023
STV Group plc
Trading Update
-- STV operating profit* expected to be c.GBP20m in 2023,
impacted by weak national TV advertising in Q4 and the related
effect on the rate of commissioning in Studios
-- Group revenue up over 30% for first 9 months, more than offsetting linear advertising decline
-- Digital and Studios revenue and operating profit* expected to
be materially up on 2022, underlining the continued success of
STV's diversification strategy
-- Studios operating profit* now expected to be at least GBP5m
-- Regional (Scottish) advertising expected to continue to outperform National
Simon Pitts, STV Chief Executive, said:
"STV continues to make strong strategic progress despite a
challenging linear advertising and commissioning market impacted by
ongoing economic uncertainty in the UK.
Our diversification strategy delivered total revenue growth of
more than 30% for the first 9 months of the year as well as
material profit growth in our Digital and Studios businesses.
While the linear advertising picture is weaker than expected in
Q4, VOD advertising on STV Player continues to show good growth in
2023 and STV regional advertising is once again outperforming
national thanks to the ongoing effectiveness of the STV Growth
Fund.
We remain confident in our future growth prospects, with a
strong content line-up on STV and STV Player, a compelling pipeline
of new programme ideas across the expanded STV Studios, and a clear
growth strategy, ensuring that we are well placed for the economic
recovery when it comes."
-- STV Group plc today announces that it expects operating
profit * for the year ended 31 December 2023 to be around GBP20m
due to ongoing weakness in the linear TV advertising and
commissioning markets relating to UK macroeconomic uncertainty.
-- STV's total advertising revenue (TAR) improved in Q3 and
performed in line with guidance at +3%, benefitting from a strong
programme line-up including the FIFA Women's World Cup and the
Men's Rugby World Cup. As a result, TAR for the 9 months to the end
of September improved to -9% from -14% at the half year.
-- As expected, year on year advertising performance in Q4 2023
has been impacted by the presence of the FIFA Men's World Cup in Q4
2022. However, the underlying linear advertising market has also
been softer than expected due to the ongoing economic uncertainty
in the UK. As a result, we expect Q4 TAR to be down around 15% and
full year TAR to be down around 10% versus 2022, which was the year
of the second highest advertising revenue performance ever for
STV.
-- Within that, VOD advertising is up 14% for the 9 months to
the end of September, with 9 consecutive months of year on year
growth, and we expect STV's digital operating profit to be up at
least 10% for the full year.
-- Regional advertising is down 10% for the 9 months to the end
of September, ahead of national linear advertising (-14%), and we
expect Regional to continue to outperform National for the full
year.
-- STV Studios (including Greenbird) has continued its momentum
in 2023, producing a record 70 series this year while securing c.50
new commissions and recommissions, despite the global commissioning
market also being impacted by the economic slowdown.
-- STV Studios revenue will nearly treble this year to
GBP65-70m, comfortably in excess of our GBP40m target, with
operating profit of at least GBP5m. This is below previous guidance
of GBP70m of revenue and GBP6-6.5m of operating profit due to
commissioning softness in the second half of 2023. Within this
Greenbird will contribute GBP15-20m revenue and c.GBP3m of profit
in the second half, broadly as guided.
-- Overall, STV Group revenue for the first 9 months of 2023 was
GBP114m, +32% on the same period in 2022 (+41% including
Greenbird), comfortably offsetting the decline in linear
advertising revenue.
-- The combination of continued strong cash generation across
the business and management actions means that year end net debt
will be between GBP30-35m. There continues to be strong focus on
cost control across the Group, with cumulative cost savings of
c.GBP3.5m delivered across 2022 and 2023 so far, and the
integration of Greenbird Media is on track, with synergies of at
least GBP750k p.a. from 2024 reconfirmed.
The information contained in within this announcement is deemed
by the Company to constitute inside information as stipulated under
the UK version of the Market Abuse Regulation (EU) No 596/2014 as
it forms part of UK law by virtue of the European Union
(withdrawal) Act 2018. Upon publication of this announcement, this
inside information is now considered to be in the public
domain.
ENDS
Enquiries:
STV Group plc:
Kirstin Stevenson, Head of Communications, Tel: 07803 970106
Camarco:
Geoffrey Pelham-Lane, Partner, Tel: 07733 124 226
Ben Woodford, Partner, Tel: 07790 653 341
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END
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