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.