STV Group plc

Hello, everyone. I hope you're all well and that you all had a good summer. No doubt it's a distant memory, albeit the sun is still shining. In a moment, Lindsay and I will talk you through our results for the first six months of 2023, provide an update on our financial and strategic progress, as well as a sense of the outlook for the business. And as usual, we'll show you some highlights of what is another year of big event television on SCV. But first of all, let me hand over to STV's chair, Paul Reynolds, for some words of introduction. Paul.

Hey, thanks, Simon. Good afternoon, everybody. You don't need me to tell you it's been a busy and turbulent period for businesses and the markets, the public markets in particular, and the media sector is no different. At STV, we've been focused on navigating these uncertain times with uncertainty. We hope calmness and strategic clarity. We've been continuing to deliver to our viewers a high quality appointment to view content that they expect from us. We've been endeavouring to be a trusted partner for our advertisers, for local businesses and for the creative sector. And we've been continuing to transform STV into the sort of diversified media company that can thrive in whatever are the prevailing economic conditions. And as you know, that has been and continues to be our strategy. You'll see real evidence for that ongoing transformation in the results that we are reporting today. We expected this past six month period to be challenging. I guess most people have done. given the macroeconomic picture, and so it's proven. But the core broadcast business remains resilient and well-placed for recovery, and there's been a step change in the pace of growth in our key growth areas of digital and studios, and due to the proactive measure, really substantive proactive measures and decisions that we've been taking and have taken during the last half, We've got a very committed and talented, ambitious team at STV. I think we've got a bit of a track record of delivery. And I think we're well placed to deliver for the future, given the strategy, the position we've reached, whatever the current economic conditions are, we'll come through this. And the board has very strong grounds for optimism as we go forward. So with that, I'd like to hand over to Simon and Lindsay to take you through the results. Thanks.

Thank you, Paul. So the first half of 2023 has seen us markedly accelerate the diversification of STV in what continues to be a tough economic climate for all businesses, delivering excellent total revenue growth of over 20%, while seeing an expected group profit impact of 33% due to weak linear advertising and rising costs, which are starting to ease somewhat as we move into the second half of the year. As an illustration of how far the business has progressed in the last five years, strong revenue growth in each of our key areas of studios and digital comfortably offset the linear advertising revenue decline in the first half, with studios revenue almost quadrupling, even before the positive effects of the recent Greenbird acquisition is felt in the second half, and digital revenue continuing to grow on the back of our new streaming partnership with ITV. On screen, our audience position remains very healthy. We had our biggest half year ever on STV Player with streams up 25% and new registration up by two thirds. And we retained our crown as Scotland's most popular peak time TV channel for the sixth first half in a row, growing our lead over BBC One. Total advertising revenues were down 14% from January to June, in line with our previous guidance, but Q3 is more encouraging, and we expect the quarter to be up around 3% to 5%, driven by big events on STV like the Women's Football World Cup earlier in the summer and the Men's Rugby World Cup. We're clearly still living in uncertain economic times and it's hard to call the outlook for linear advertising beyond Q3 as it's so dependent on macroeconomic sentiment. However, I can say two things very clearly. Firstly, that we're confident the market will bounce back decisively as the economy recovers because we've seen this sort of cyclical dip many times before and only TV has the collective reach and mass scale that advertisers require to build their brands. And secondly, that when the linear ad market does recover, STV is very well placed to benefit. As a guide, every 1% upturn in total advertising for the year roughly translates into half a million pounds of incremental profit for STV, which is clearly very material for us. That said, STV obviously needs to be a business that can thrive in all economic climates. It's why we embarked on a proactive diversification strategy five years ago, and we're particularly encouraged that we now expect at least 60% of our 2023 operating profit to come from outside traditional broadcasting, comfortably ahead of our target. and evidence that we're rapidly becoming a more resilient, more balanced media business focused on growth. And it's against that backdrop that the board is recommending an interim dividend of 3.9 pence per share for the first half, in line with the same period in 2022. Over to Lindsay now to delve deeper into the financial results.

Thanks, Simon, and hello, everyone. Starting with the key financials, total revenue at 75 million was up 21% on the first half of last year, with growth in digital and studios more than offsetting the declines in linear advertising and demonstrating the benefit of our diversification strategy. Total advertising revenue at just under 46 million was 14% down on the prior year, with national advertising down 19%, feeling the worst effects of the current climate of high interest rates and inflation. Regional advertising was down 14% with digital revenues growing strongly up 9% to £10 million. VOD advertising on the STB played as the biggest component of digital revenue and was up 14% year on year. The first half of 2023 was a particularly strong period for studios, which generated revenue of more than £27 million, nearly 300% up on the first half of last year, and more than its full year revenue for 2022. Adjusted operating profit of £8 million was down a third on last year, impacted by the flow through of the decline in higher margin linear advertising revenues and the pressures of cost inflation. Our adjusted operating margin fell by a similar order of magnitude to 11%, as did adjusted EPS, which was 14.8 pence for the six months. At that level, dividend cover is around four times for the interim. Net debt was 16 million pounds at the end of June, only marginally up on the 2023 opening position. And with net debt to EBITDA of 0.6 times, we were well within our covenant maximum of three. These metrics exclude the impact of an acquisition of Greenbird, which I'll come back to when we get to talking about net debt. Moving to the group P&L, this really just pulls together the key numbers from the previous slide and reconciles the statutory to adjusted results. Ordinarily, I wouldn't talk about interest costs, but in the current climate, it's worth a few words. As you'd expect, as base rates have increased, so has our interest costs with interest cover coming down. However, at 24 times, this still shows significant headroom against the covenant minimum of four times. In addition, while interest rates have gone up, the margin that we pay under our bank facility is linked to leverage. And as the group has been below one times for some months now, the margin payable has remained constant. The other point to briefly touch on is the high-end television tax credit. These are amounts due from HMRC under the scheme to support creative industries and are included in our adjusted operating profit as a contribution to costs, whereas HMRC currently views them as a tax item. There are changes to the regime coming in next year under which HMRC is changing its view to align these costs with our presentation as operating income, so they'll no longer be an adjustment to the statutory results from 2024 onwards. A few brief words on the exceptional costs of 2.8 million incurred in the period which we flagged back in March and relate to our new agreement with ITV for digital content and national VOD sales representation. Our expectation is that any further amounts in respect of this deal will be limited to legal costs associated with finalising the long-form agreement and so we will still expect the full year cost to be around 3 million pounds unchanged from previous guidance. In the second half, we'll recognise the one-off costs of the Greenburn acquisition, which are around £1 million, and there may also be some cost of change associated with integration and realisation of synergies. As with all costs, we'll look to manage those carefully, and in any case, we'll reflect them in the assessment of overall synergy benefit to ensure reasonable payback. Turning to advertising revenue, it's easy to get lost in the year on year comparators, particularly when we've been trading through as volatile a period as the last few years. So these graphs are 12 month rolling average charts going back to January 2019 and running up to the 30th of June this year. The charts clearly demonstrate the resilience of linear advertising and the steady upward direction of VOD over that period. Starting at the far left with national advertising, the line of best fit here is pretty much flat, just a slight decline over the four and a half years. The regional chart has a more pronounced wave shape, but the start and end points are in the same place. This chart includes all regional advertising and so includes Scottish government, and that, or more accurately, COVID public health advertising, is the driver of the growth in the months up to the peak in January 22, and then the reduction since then. Lastly, VOD and a steady growth trajectory over the period. Now that we're tied to ITV in terms of national VOD advertising growth, and we have a more sophisticated addressable advertising sale through Planet V, we expect the strong rate of growth to continue. Notwithstanding the long-term resilience of advertising revenues, we do expect the year-on-year comparators to be highly variable this year. Our Q1 tar was down 15%, with Q2 down 13%, combining to give the H1 performance of down 14% that we've discussed. As you might expect, most advertising categories were down year on year in the first half, with the largest being finance, driven by online and retail banks, while travel and airlines were one of the few categories that saw an increase, fuelled in particular by online holiday companies. Looking forward, Q3 is more encouraging and we expect it to be up by 3-5% with each of the months in the quarter in growth, some of those helped by sporting events like the Women's Football World Cup and Men's Rugby World Cup. Across both linear and VOD advertising, the biggest growth driver for the quarter so far is FMCG, the food and household stores subcategories in particular. Confectionery is also up, and although retail overall is still down on Q3, supermarket spend is improving, which is encouraging, and the new car market is also showing some signs of improvement. Our view remains, however, that Q4 will be challenging. We have big shows like I'm a Celebrity, but last year's comparator contained the FIFA Men's World Cup in November and December. All that said, there's much we don't know, and given the operating leverage of the advertising parts of the business, reasonably small improvements in ad revenues can have a meaningful impact on STV's profitability. I've already highlighted that revenue growth in digital and studios has more than offset the declines in linear advertising revenues. On this side, you can see the impact that the growth areas combined with cost savings have had on our adjusted operating profit, as well as the operating leverage of the linear advertising part of the business. We've realised cost savings that mitigate roughly half of the inflationary increases incurred, which is in line with the guidance we shared in March. These savings have been realised across the business in areas like marketing, other areas of discretionary spend, reduced advisory and administration costs, and general trimming of budgets without taking actions that would be detrimental to the future of the business. Combined with the incremental year-on-year profit from digital and studios, the three green bars on the chart offset around 40% of the impact of linear advertising and inflation on our bottom line. As you'd expect, we review our cost base on an ongoing basis to ensure we're fit for purpose and operating as efficiently as possible. And we'll continue to look for savings to improve margins and profitability where appropriate. Moving on to the divisions, I'm going to broadcast first. Consistent with their relative performance over recent years, regional advertising continues to outperform national, even in a period with a significant decline in Scottish government spending, which was down around 55% year on year. Regional advertising from our core SME customers was down only 2%, much better than national's 19% decline. Moving on to costs, which are 6% down year on year and where there are a couple of things at play. Firstly, we've the reduction in the cost of the national programme budget, which is the payment we make to ITV that varies in line with national advertising revenue. These payments are around 60% of the division's cost base and reduced in line with national revenues year on year, courtesy of our unique variable cost model in the division. Secondly, broadcast is the largest division in the group and has the biggest physical footprint and number of employees. This means it bears the largest proportion of energy and salary inflation costs. While we have mitigated roughly half of the impact of these across the group, savings have not been realised proportionate to the increased cost in each division. So there's more of an impact in broadcast than there is elsewhere. These factors combined to push the divisions margin down to 13% year on year, which we would obviously expect to improve as TAR comes back. The digital financial performance is probably the most straightforward of the divisions for the first half. Revenues grew strongly as STB player streams continued to grow and we benefited from the new ITB partnership and digital VOD sales. The division has also secured savings across marketing, ad serving and other areas, which when combined with revenue growth, drives the margin to 50% for the six months. We'd expect this performance to broadly continue through the second half, although maybe fall back slightly from this level to the year end. Moving on to studios, where the commissioning wins of the last 18 months or so are really bearing fruit, with revenues almost four times higher in the first half of this year compared to last. We've previously highlighted the impact that drama deliveries can have in any given period, and that's particularly relevant for the first six months of this year, as we've delivered 10 drama episodes across Criminal Record for Apple TV+, and Screw Series 2 for Channel 4. It's worthwhile just touching on the financials associated with Criminal Record for a moment. This commission with Apple was won by Todd Productions under a co-development and co-production arrangement with STV Studios' in-house drama team. This means that while STV recognises the full revenue from the programme, the production fee is shared between us and Todd, and that pay away comes through as an operating cost of the division. The production fee itself comprises a core fee like that agreed between any drama commissioner and producer, plus a streamer premium. The premium is market standard for streamers and it's an amount paid upfront to buy out all future rights and keep the show on their platform all around the world. Essentially compensation to the producer for the streamer buying all future secondary sales revenues. Even with the payaways to Todd, STV's share of the production fee and streamer premium mean that Criminal Record is a strongly profitable programme for us and it's designed to be a returner. The balance of profitability is still very much H2-weighted in studios, aligned to when traditional broadcasters look to commission to fill a programme schedule running from September to May. But making a profit in the first half is another first for the division, and a meaningful turnaround from the £1 million loss realised in the first half of last year. As an indication of that H2 weighting, we've already recognised production margin of around one and a half million pounds in July and August. And so we're making good progress towards our full year guidance of six to six and a half million. Moving on to the cash flow statement, while net debt at 16 million pounds is almost 10 million higher than the same time last year, it's only marginally up on the 15 million pounds opening position on the 1st of January. Across 2021 and 22 we had a meaningful net working capital cash outflow and about half of that has unwound over the first half of 2023. Operating cash conversion remains strong and at more than 100% reflects that working capital unwind. Capital expenditure has been held other than essential investment as we've been cautious in the face of tougher ad markets and an expectation of completing the Greenbird acquisition. The production financing provided to two cities for Blue Lights has been repaid in full, although we have granted them a much smaller working capital facility which will be repaid before the end of the year. Cash dividends reflect the final dividend for 2022 paid in May of 7.4 pence per share. Then after the period end, we acquired 100% of the Greenbird Media Group for an initial cash consideration of £21.4 million, which saw our net debt increase to around £32 million, including around £6 million in cash balances within Greenbird. As part of the transaction, we released 10 million pounds from our accordion facility to increase the main revolving credit facility to 70 million. This was principally to provide additional liquidity headroom, but we don't currently anticipate using any of this incremental facility. Net debt isn't much different today than it was when we completed the deal, and given that this is the point in the cycle when our borrowings tend to go up a bit towards the peak advertising months of October and November, we're in a good place. Assuming programme funding and delivery arrangements remain as currently forecast, at year end we'd expect net debt to be lower than it was at the time of the acquisition, with the ratio of net debt to EBITDA around one times. Lastly, a few words on pensions, where the accounting deficit of our defined benefit schemes has reduced over the six months to £55 million. As you'd expect, this is a result of the higher discount rate driven by corporate bond yields over the period, which drives down the valuation of the liabilities. There's good dialogue between the company and the trustees in relation to the schemes, with two independent trustees appointed by the company providing broader insight and experience from their wider portfolio. The next triennial valuation for the schemes is due at the end of this year and we'll be starting preparatory work with the trustees in Q4. We expect the valuation to be concluded through 2024. Right, that's more than enough from me. We've got a showreel for you now and then Simon will take you through the strategic reviews.

So there we are. You can see it's been a big year on screen already and it's set to get even bigger. I probably don't need to tell you that this Friday sees the start of the Rugby World Cup in France with a massive game on Sunday, South Africa versus Scotland, live and exclusive on STV. I'll start with a reminder of our diversification strategy and our growth targets. As you know, we have a clear and well-understood plan that has delivered strong financial results in recent years, and that plan has three pillars. Firstly, building a world-class studios business producing returning TV series for the biggest networks and global streamers. Secondly, driving our digital performance by becoming a leader in streaming through STV Player in Scotland and beyond. And thirdly, maximizing the unrivaled strength of our broadcast business by maintaining our clear viewing and advertising leadership in our home market. Two and a half years ago, we announced ambitious targets to quadruple our studio's revenue and double the size of our digital business by the end of this year. And I'm delighted to say that we're on track to exceed those targets. The linear advertising downturn means we're unlikely to hit the 20 million broadcast revenue target in Scotland. But overall, we will comfortably exceed our key diversification metric of delivering at least 50% of our operating profit from new growth areas by the end of the year. In fact, we think we'll reach over 60%, way ahead of plan and an illustration of how far we've come in the last five years. For context, in 2018, our non-broadcast earnings were only 18% of the total. This slide tells that five-year diversification story more visually. The pie chart on the left shows that in 2018, nearly 80% of group revenue came from traditional broadcasting with a small minority from our fledgling studios and digital businesses. Fast forward to 2023, and not only do we expect our group revenues to be 50% higher than in 2018, they're also much more balanced with less than 50% coming from traditional television and the broadcast and studios businesses now similar in scale, with each of our three divisions contributing materially, not just to revenues, but also to group operating profit. Our KPIs also tell a story of continued strong momentum and progress in 2023 so far. In green, the immediate impact of the Greenbird acquisition in studios with a total of 29 new program commissions for the first half alone that will deliver later in 2023 and 24. And we now have 39 returning series across the enlarged group compared with nine this time last year. In digital, all the key metrics are up, total streams, player exclusive content, and active users. And SCV's unrivaled leadership in broadcasting continues, with our all-time viewing share holding steady in a highly competitive market, and the number of new Scottish advertisers still at healthy levels. Moving on to the divisional updates, and I'm gonna start with our studios business, which is growing at an increasingly rapid rate. We were already on track to double the size of STV Studios this year and the recent Greenbird acquisition means we'll take an even bigger stride forward in terms of scale, profitability and creative firepower. We couldn't be more excited about the newly enlarged business and the team have really hit the ground running as you'll hear in a minute. And just to reiterate the financial and strategic rationale for the deal, It is materially earnings enhancing and EPS accretive for our business in 2023, and crucially also margin enhancing for SDV Studios. At a stroke, our in-house creative labels grow from nine to 24, our returning series more than treble, and our SDV Studios senior management teams strengthen significantly through the addition of highly respected creative and commercial leaders from Greenbird. That added scale makes us one of the country's leading production groups and takes us much closer to our goal of becoming the UK's most successful nations and regions producer in an era of leveling up where the center of gravity in UK TV production continues to shift decisively away from London and the Southeast. With scale also comes much greater resilience as a production business. We're hearing a lot about the commissioning slowdown in the market at the moment in the US and the UK, which is linked to wider economic uncertainty and very much a cyclical thing in my view. But the truth is that a group of 24 production companies with 39 returning series is far better place to navigate a more challenging market than a smaller player would be. So in short, Greenbird is a transformative deal for us financially and creatively. It is right on strategy and it will accelerate our revenue and earnings diversification away from linear advertising and towards the growth areas of content and IP ownership around the globe. The enlarged STV Studios will be a 70 million plus revenue business in 2023, made up of the nine majority owned labels on screen there that are now part of the group. We're one of the very few production companies in the UK to make both scripted and unscripted shows with an even balance across the two, meaning that our addressable market is all of UK TV production spend, not just a subset of it. And we now have an incredible portfolio of returning series, which will make up nearly half of our revenues in 2023 and give us a strong head start each year in terms of our financial performance. The remaining creative labels are 15 minority investments, providing significant strategic option value for our studios group over the next few years. The larger minorities on the left range from 25 to 40% stakes, and it is these companies that are most likely to move into meaningful profitability over the short to medium term. In some cases, there are prescribed routes for STV to consolidate, and in others, there are strong relationships and service agreements in place. But what this does, in simple terms, is give STV an exciting de-risked M&A strategy that should allow our studios business to scale even more rapidly without the need for large greenfield acquisitions. We will, in effect, be able to evaluate our M&A targets from close quarters before consolidating these businesses in success. We expect Two Cities Television to be the first of the minority investments to consolidate given its recent success. Drama Blue Lights was a standout hit for the BBC with an average audience of 5.7 million viewers per episode and it's already been greenlit for a second series which is filming in Belfast as we speak. It's even up for Best New Drama at the National TV Awards tonight in London so I really hope you've all been voting. We're expecting two cities to be profitable in 2023 on the back of this success and further commissioning news anticipated shortly. And under our agreement with them, that will trigger SCV moving to majority control of the business on pre-agreed terms, providing a material boost to studios 2024 financial performance. This next slide shows some of the creative firepower joining the group with the Greenbird deal. Even in the short time since the July announcement, there have been four further commissions for Rumpus Media for Channel 4, BBC and Amazon Prime, and three new commissions for Tuesday's Child and their subsidiary Interstellar. One of these new shows was announced with some fanfare at the Edinburgh TV Festival a few days ago. A big new splashy reality format for ITV in 2024 called The Fortune Hotel, which will be filmed in the Caribbean and is described as a cross between White Lotus and The Traitors. I mean, they had me at White Lotus, to be honest. We're also very focused on the international growth potential of our expanded studios division. Lego Masters has already been sold to over 20 territories, including China, South America, and across Europe. And later this month, series four of its US version will play on the Fox network in primetime. Our quiz format, Bridge of Lies, is on a similar trajectory, now sold to 15 territories worldwide, including a new Spanish version on the slide there, about to play on national broadcaster TVE. We're now developing a joined-up international strategy across the enlarged group to generate maximum value from our shows outside the UK, including potentially having the ability to produce or co-produce shows in key territories like the US and Europe. That international strategy is just one of the work streams that we're prioritizing as part of a Greenbird integration that's already well underway. The team is focused on key back office tasks like the operational integration of the business and realizing cost synergies. But equally, there are important creative and commercial synergies to aim for, whether that's reviewing our UK growth strategy across the various labels or developing a commercial IP strategy to maximize the value of our content with global distributors. We expect to make significant progress integrating the businesses by the end of this year. And as guided in July, we will deliver revenue and cost synergies of at least £750,000 per annum from next year. To finish this section then, a reminder of the ambitious vision for studios and the key strategic objectives that underpin it, growing returning series, expanding customers in the UK and internationally, and a combination of organic and M&A driven growth through our unique portfolio of majority and minority investments. In short, there is no ceiling to the growth of STV Studios over the coming years as we aim to continue to win market share both in the UK and internationally. Turning now to digital, and the first half of 2023 has once again seen strong growth for our streaming service, STV Player, against all the key metrics. Our vision here is to be Scotland's leading AVOD streaming destination, as well as a UK-wide free streaming destination. The simple goal here is more people watching more content for longer, because we know that that translates into more financial success. New registrations were up 65% in the first half as we added over 400,000 new users. Active registered users were up 300,000 or 38%. And VIP users, those who watched the most SDV content, up a further 24%. That helped drive a 25% increase in both streams and total online consumption, all of which translated into a strong financial performance in the digital division. And you can see that we're on track to hit the stretching three-year targets we set ourselves from the end of 2023 across users, across streams and revenues. As you know, we already surpassed our goal of 5 million registered users in January this year, nearly a year ahead of target. We're at over 5.3 million as of today, but we'll now retire that metric in favour of a focus on active users and VIP users, because it's those loyal returning audiences who are more valuable to us in the long term. This chart shows our top digital titles of the year so far. In gray, our ever popular network content. In purple, the preview content coming through the new streaming partnership with ITV. And in green, the acquired series that are exclusive to STV Player and that we don't show on linear television. You'll see that our top performer is Brookside, which we acquired exclusively for STV Player and has been playing out from the start, releasing five new episodes a week to a loyal fan base. It's been a huge success, eclipsing even Coronation Street and Emmerdale, with 65% of its viewing coming from outside Scotland, helping to boost the pan-UK reach of our player. Our new exclusive drama has also been working very well, as expected, with 30 brand new shows premiered so far on the SDV Player up to six months ahead of their linear transmission. These new shows represented only 2% of all the titles in the first half, but 11% of viewing, with the top performer Irvin Welsh's Scottish crime thriller called Crime, in fact, with Dougray Scott. What's particularly noteworthy is how this preview strategy is changing consumption patterns amongst our audience. Already nearly a quarter of all STV drama viewing by the younger 16 to 44 demographic was done in the preview window in the first half, showing the potential of this new windowing strategy to attract and retain important audiences for STV. And remember, under the terms of the new deal with ITV, all this new content is paid for through advertising revenue shares in success. We don't pay up front for these new programs, reducing the risk to us and extending our favorable variable cost model into the digital side of the business. This next slide shows the early commercial impact of the ITV deal, which has been very positive so far. We said that the rationale for outsourcing digital sales was to benefit from ITV's scale and its pricing power as the UK market leader, as well as their significant investment in new targeted addressable advertising. And we're already seeing these benefits come through very clearly in our numbers. The chart on the left shows that our digital brand count is already up by 50% so far this year, broadening our revenue base and reducing repetition for our audience, which is always a good thing. Our average sales price is up even further in the first half by 55%, driving strong VOD revenue growth, but also allowing us to reduce the overall amount of advertising we show to viewers, improving their experience and driving longer-term loyalty amongst audiences. STV's price increase has also been underpinned by our launch on Planet V, the UK's second largest programmatic advertising platform after Google, which has enabled fully addressable advertising at scale on STV Player for the first time, with over 90% of our digital advertising now targeted using our own first-party registered user data. Alongside improving the content and commercial offer, continuous improvement of the SDV Player product is vital, of course, to grow our streaming audience. Launching your own app into a digital platform rather than just supplying your content is a great way of securing more control, data and prominence because you are in charge of the user experience, not the platform. The launch of our app into over 8 million Sky Q homes earlier this year was a big step forward strategically, and you can see how front and centre our brand is now alongside the likes of Netflix and BBC iPlayer. And the great news going forward is that this public service prominence is set to be enshrined in primary legislation on all digital platforms through the UK government's new media bill, guaranteeing that SDV content will be easily accessible everywhere for the long term. That prominence helps ensure that all this great content gets to the biggest possible audience. And we've got a really strong lineup for the second half of the year with dramas like the epic Winter King and new entertainment like My Mum, Your Dad with Davina McCall. The Women's Football World Cup was a real success for us with England's quarterfinal win over Colombia, the biggest match of the tournament in Scotland with a 52% viewing share. And of course, the Men's Rugby World Cup starting this Friday exclusively on STV with the small matter of France versus New Zealand on the opening night, a game worthy of the final, I think, if Scotland doesn't get there, that is. Turning finally to our broadcast business, and it's been another strong audience performance in the first half. There have been a few shrill headlines, I would say, in recent weeks about broadcast viewing declines, but that's only against the artificial highs of COVID viewing, and the facts tell a different story of the enduring popularity and resilience of the terrestrial broadcasters. On the left there, STV's top three dramas of 2023 plotted against the top three from our five closest commercial competitors in Scotland. Channel 4, Channel 5, Netflix, Disney and Amazon Prime. You can see that STV's top dramas, including Unforgotten and Vera, are twice as big as all the others. The pie chart on the right then shows the split of the top 500 programme episodes in Scotland by service in H1. The terrestrial broadcasters were responsible for 98% of the most popular shows, with STV having 76% of them versus 19% for the BBC. Netflix's share of those shows, just to stress, was 0%. And looked at a different way, the average Scot spends five times longer with broadcasted content on a TV set in the first half of this year than they did with content from Netflix and the other streamers put together. This chart shows that STV was the most watched commercial channel in Scotland for 180 out of the 181 days in H1, only pipped on the 10th of June by the Man City Champions League final against Inter Milan. And the boxes on the right show that STV's viewing position is strengthening further, with our lead over BBC One and ITV actually widening in the first half. As you know, our audience performance translates into a strong position in the Scottish advertising market where we remain the market leader by some distance. Total regional advertising was down 14% in the first half, outperforming the national picture. And this does also mask a much more resilient performance in Scottish SME advertising, which was down only 2% for the first six months. You can see on the left hand chart that our regional brand count has remained healthy in the first half of the year and throughout the recent advertising cycle. We've seen declines in the local food, entertainment and finance categories offset by gains in travel and transport, in household equipment and in retail. And on the right, it's encouraging that we've now returned to pre-pandemic ratios of government to SME spend, making it much easier to gauge the underlying health of the local advertising market. And across the bottom, you'll see that our advertising growth fund at SCV continues to do its job in a tough market, making TV advertising more affordable, more accessible, and generating a healthy influx of new advertisers, the vast majority of whom go on to become repeat clients, over 70%, in fact. Overall, we're seeing more encouraging signs in the local market, and we do expect our regional advertising to continue to outperform national over the balance of the year. In terms of the outlook, while there is clearly still uncertainty, we can report an improving picture. In revenue terms, we're expecting to continue the very positive momentum of the first half and deliver a full year revenue performance of at least 25% ahead of last year. Total advertising revenue is expected to be up around three to 5% in Q3, as we said, although down for the full year. And we remain on track to exceed the three year revenue targets we set ourselves for digital and studios of 20 million and 40 million respectively. And in the case of studios, our full year revenues are actually forecast to treble year on year to over 70 million pounds. In terms of operating profit, the impact of the linear advertising decline and cost inflation will mean full-year group-adjusted operating profit will decline versus last year, as expected, though as noted by Lindsay, 50% of the cost inflation we've been experiencing will be mitigated by savings across the business. We're also expecting a better H2 performance on the back of an improving advertising market and gains in studios, boosted significantly by the acquisition of Greenbird, which will add material revenue and operating profit to the group in the second half. And on that front, we are reconfirming our previous guidance from July of six to six and a half million pounds of adjusted operating profit for the enlarged STV studios in 2023. Overall, as we've said, we're now expecting to deliver at least 60% of STV's earnings from outside linear broadcasting in 2023, comfortably ahead of the 50% target. And that means that new targets are required for the next phase of STV's diversification, which will be confirmed in due course. That's it then. I'll leave you with the summary and our key message that the STV of 2023 is now a very different business to the one we took on five years ago. A more balanced, more resilient, more growth and delivery focused business, all of which has created a strong platform for the next phase of our diversification.