STV Group plc

Thank you everyone for joining today. Good afternoon. I'll start with an overview of full year 2025. Lindsay will then take you through the finance review before I return to cover strategic progress and how we are positioning the business for success. We'll finish with Q&A. Our full year 25 performance landed in line with guidance. Group revenue of £176.9 million and adjusted operating profit of £11.6 million reflected disciplined delivery in a difficult advertising and commissioning market. Our cost savings programme is on track delivering £8 million of permanent savings by full year 26. SDV Radio launched in January with a strong early response from both audiences and advertisers. We entered 2026 with a clear plan and reasons for optimism with an expanded World Cup, the scaling up of SDV Radio and international commissions for our studio's business. We are also continuing to explore opportunities emerging from a rapidly transforming media landscape. Consistent with our focus on financial discipline, the board is not recommending a final full year 25 dividend to preserve flexibility and liquidity as trading stabilises, but intends to return to paying a dividend when it is prudent for the group to do so. Now over to Lindsay.

Thanks, Rufus. I'll just kick off with a summary of the key financials for the year, which are in line with the trading update that we issued in January. The group generated revenue of £177 million in 2025, down 6% on the prior year. Studios revenues remained resilient to £83 million, down only 1% and underpinned by scripted activity, with the main driver of the group revenue reduction being advertising, which was down 10%. The largest component of TAR is national linear advertising, which was down 16%, with regional revenues performing much better, down only 1%. Total digital revenues at just over £20 million grew by 3%. Adjusted operating profit at £11.6 million was down 44% on the prior year, slightly ahead of expectations, with an operating margin of just under 7%. Total net debt was just over £45 million at the bottom end of our guidance range and included a lower value of production financing than this time last year, following receipts from commissioners. Moving to the Group P&L, there are a few points to highlight. Profitability in both the audience and studios divisions was down by 35% year on year, with the reduction in high margin advertising revenues and lower new format sales combined with cost pressures being the main drivers of the decline. At the end of December, the studio's order book was £33 million, down on the £40 million reported in our interims as revenue has been recognised over the second half. Corporate costs are flat year on year as we've offset inflationary increases with savings. The increase in finance costs is mainly due to the reversal of an unrealised FX gain in 2024. Interest on the group's borrowings was only up slightly as the lower margin payable under the RCF negotiated at the start of 2025 offset the impact of the higher average net debt across the year. In terms of adjusting items, I've included an appendix with the detail. Most of the write-offs were recognised in the first half of the year, with the restructuring costs of £1.7 million being the redundancy costs associated with the £3 million cost saving programme announced in September and executed over Q4. We flagged a cost of change of around £2 million at that time, and we've come in slightly lower than that. Turning to advertising revenue, the table on the left shows the performance of each main advertising revenue stream in 2025 compared to both 2024 and 2023, the latter intended to exclude the one-off impact of the Euros. National linear advertising was the poorest performing relative to both years, with regional linear turning in a relatively strong performance of down 1% on 2024, equivalent to 2% growth on 2023. VOD revenue growth slowed in 2025 to 3% and was up 12% on 2023. The final column of numbers in the table is our current outlook for Q1. Generally, we're not seeing any significant change in the advertising market as we move from 2025 into the start of this year, The weaker performance from regional linear that you see in the table is a combination of the particularly strong performance in 2025 with the decision of a small number of larger advertisers to re-phase their spend to later this year. On a more positive note, advanced sales for World Cup advertising and sponsorship packages are going well and give us reasons to believe Q2 will be stronger. This next chart shows the main moving parts in adjusted operating profit. The largest bar is advertising, which drives more than 80% of the profit decline after taking account of the benefit from the underlying contractual arrangements with ITV that sees our programme cost move in line with national revenue. This reflects the operating leverage in the audience division, which will work in the opposite direction in Q2 when the World Cup is on our screens. You can see a small bar for radio. This was the modest investment we made in the second half of the year, to build the station ready for launch in early January. We achieved this on time and for a slightly lower upfront investment than previously indicated. Profitability in studios was lower in 2025 than the prior year, driven by unscripted, with the drama labels all in active development for streamers throughout the year. The last two bars towards the right of the chart reflect changes in the cost base of the business. Inflation and increased employers NI are meaningful for the company, but we've more than offset those cost increases with savings. Here we recap our previously stated position in terms of cost saving targets and how we're delivering against them. In March 2024, we announced a £5 million annualised target for the end of 2026. We've delivered just over £4 million so far and are on track to hit our target by the end of this year. These savings have been realised across the business, predominantly in third-party spend, with some roles impacted through activities including closure of certain creative labels. We've made savings in broadcast operations, freelance activity, marketing, post-production facilities and support functions. In September last year, we announced an incremental £3 million cost saving target, of which £2.5 million would be realised in 2026. The majority of this will be delivered through a reduction in headcount, with the necessary actions being taken in Q4 to realise savings this year. Our approach to determining these cost savings was tailored to each part of the business and reflects a process through which we considered the role of each team, whether there are technology advancements that could drive efficiencies and our expectations of future activity levels, underpinned by the decision to protect current and future sources of STV-controlled revenue. The main area where work is ongoing is in news, where we await Ofcom's decision on the changes we propose to our licences due after the Scottish election in May. Turning now to cash and net debt, the group's total net debt at the end of the year was just over £45 million, an equivalent to leverage of two and a half times. Interest cover was 6.1 times at the end of the year, with both metrics well within their covenant limit. Production financing loans have been repaid during the year as cash is collected from commissioners and tax credits received. The loan amounts drawn down at the end of the year are for new facilities rather than amounts outstanding on those in place previously. We expect advertising revenue to improve with the World Cup, but that cash won't be collected until Q3, so we anticipate net debt and leverage will go up slightly from their current level at the half year and then reduce again at the year end, remaining with covenant levels throughout. On pensions, the accounting deficit reduced to £39 million at the end of the year from £48 million 12 months ago, and we remain on track to achieve full funding on a technical provisions basis by October 2030. We've agreed contribution payment flexibility with the trustees that allow us to defer payments previously due this year into 2027. And we expect to take advantage of this flexibility as group trading remains challenging. I'll now hand you back to Rufus, who will take you through the strategy update and outlook.

Thanks very much, Lindsay. 2025 was a tough year for UK media. Audience behaviour continued to shift, macro uncertainty continued and commissioning slowed down. However, we've remained focused on delivering the fast-forward strategy. In the audience division, which now brings together broadcasting, streaming, and audio under one plan, we have focused on maximizing reach and engagement, expanding our advertising proposition through more formats, more data, and more activation points, and diversifying revenue through digital audio and using the strength of the SDV brand and our relationship with audiences to identify new opportunities. In studios, we are strengthening returnable IP, broadening our customer mix beyond PSBs, and developing content with global appeal. We are also exploring digital content models that open up new monetization opportunities. Across the group, we continue to focus on efficiency so we can invest where it matters while staying resilient. Taking a look at our audience division, despite ongoing shifts in viewing behaviour, STV continues to have huge scale in Scotland. We reach 75% of Scotland each month. That's three and a half million people. We have greater reach than the combined ad tiers of Netflix, Prime Video and Disney Plus combined. 97% of the top 500 overnight audiences in 25 were on STV. SDV Player, our streaming service, also had a record year with strong growth in streaming hours and daily active users. Total viewing did decline in line with market trends, but our scale and brand strength ensure SDV remains a highly effective platform for advertisers. Now to STV Radio. STV Radio launched on the 6th of January and has made a strong early start, onboarding 23 brands, including 5 entirely new to STV, while existing advertisers have increased their advertising investments by adding radio to their media schedules. We are seeing well-established TV clients maintain their TV investment and extend into radio. CR Smith, for example, now sponsors STV Radio's breakfast show, as well as our recently launched football podcast, alongside its continued sponsorship of STV Sport on television. STV Radio complements TV by offering strong integration with editorial content and reaching audiences in different moments of the day. Official audience data will be available in August. And now looking at SDV news, we are focused on the right news proposition for now and for the future. Ofcom is consulting on our proposal for a simplified 6pm news programme and accelerated digital expansion to ensure we remain relevant and can grow our audience at a sustainable cost base. Digital news, as you can see on the right hand side, grew by 350% in 2025. 2026 will be a major news year for Scotland with Scottish elections and the men's FIFA World Cup. Now looking at our advertising proposition. STV is Scotland's leading advertising platform, reflected in the scale and diversity of our customer base. Every brand you see on this slide chooses STV for the strengths of our reach, the trust in our environment, and the flexibility of our formats. In 2025, 318 brands advertised with STV. We have the combination of mass reach alongside highly targeted capabilities. Advertisers can buy broad audiences through linear, precision audiences through SDV Player, and increasingly integrated campaigns across all of our products. TV also continues to outperform on marketing effectiveness. Independent studies consistently show it is the most effective medium for both short-term results and long-term brand growth. And when TV is combined with radio, now part of our growing portfolio, it delivers a proven 20% multiplier effect, increasing overall ROI. So STV starts from a position of strength, a trusted, effective, scaled platform with deep advertiser relationships. We are now building on that strength by opening up new digital opportunities that make STV accessible to more brands, more budgets, and more categories than ever before. Here's a look at our expanded digital proposition, opening STV up to a broader universe of advertisers and budgets. Pause ads on the left hand side are a great example. Since launching in November, adoption has been immediate with 15 regional brands live on the service. Pause ads offer a high impact, contextually relevant format and early results show strong appetite for these non-intrusive but highly visible ad moments. When a viewer hits pause, an ad is served. STV Adapt in the middle takes us into a new part of the market, a low cost SME entry point using AI generated creative to remove production barriers that kept smaller businesses out of TV quality advertising. Currently delivered through STV Player, it will scale further through linear addressable in H2 2026, enabling more precise targeting across IP viewing on the STV linear channel. Pilot results from the four brands you see on this slide have been impressive. And then STV Radio strengthens our cross-platform proposition, delivering new digital revenue. It provides a route into STV for brands who are not natural buyers of TV airtime, broadens our customer base, drives incremental spend, and opens up new commercial opportunities. Together, these innovations expand our commercial footprint, diversify revenue, and create digital advertising products that complement our broadcast offering. They position STV strongly for structural market shifts, enabling advertisers of all sizes to access STV's trusted, brand-safe environment for flexible, data-driven and efficient advertising. So as we look ahead to 2026, our focus is clear, maximising STV's reach and converting that strength into sustainable revenue growth. And we have four key objectives. Firstly, in terms of audiences, maximising reach is essential to our competitive position. The World Cup will help re-engage viewers across the schedule and STV Radio adds a new daily touchpoint, strengthening our multi-platform footprint. Secondly, we are growing digital revenue. Pause ads, adapt, and linear addressable give us a strong engine for monetization and will help us deepen commercial partnerships across linear, VOD, and audio. Thirdly, also expanding and diversifying revenues. Competitions represent a high engagement, high margin area. We will take initial steps into this space in 2026 via STV radio. We also see an opportunity through intelligent use of our content archive on YouTube for further diversification, which will also bring a younger and more digital first audiences into the STV universe. And fourthly, we will do all of this whilst delivering cost savings and structural changes to make the group more efficient and aligned to future growth. As stated for full year 26, we are on track for eight million pounds of savings this year. Now turning to studios. We continue to demonstrate real resilience in a challenging commissioning environment. On the scripted side, we've delivered a strong slate with major partners. Blue Lights Series 3 has aired and Series 4 is in production. Amadeus was Sky's most watched drama in 2025. Criminal Records Series 2 is about to land on Apple TV. And The Witness, our first Netflix show, is delivered and landing later this year. Channel 4 has also commissioned brand new drama Army of Shadows, produced by Two Cities, the same team that make Blue Lights, again delivering later this year. These are premium, high-quality titles that reinforce SV Studios' ability to deliver returning series and major new commissions, even in a soft market, and underlines the strength of our relationship with global broadcasters and platforms. In Unscripted, the scale of our returning brands is equally important. We had 17 returning series and 14 new returnable formats, supplying a wide mix of customers. That breadth is a strategic advantage in a cautious market where demand for reliable, repeatable formats is stronger than ever. We are delighted that Channel 4 announced the recommission of Game of WoW yesterday. Taking a step back, the broader market is clearly undergoing a major adjustment, reshaping commissioning behaviour and the opportunities available to producers like STV. Public service broadcaster spend is under pressure, with broadcasters working to tighter budgets, driving tougher commissioning choices and a stronger focus on cost-effective, high-performing content. This structural trend will continue to shape the UK market. In unscripted, buyers are becoming more conservative, prioritizing proven repeatable formats over higher risk ideas. Our strong slate of returning franchises position studios well in this environment. We are also seeing a shift in streamer strategy with global platforms concentrating spend on fewer higher impact titles that cut through a crowded landscape. Demand for standout premium content, however, remains strong. In premium scripted investment continues, buyers still want high quality drama and our 2025 commissions demonstrate how important trusted relationships, high delivery standards and a proven track record have become. Across the board, commissioners are leaning towards established suppliers with consistent performance and the ability to manage production challenges, an area where SDV has advantages through operational capability and a strong slate of returning and high profile titles. At the same time, new opportunities are emerging. Digital-first content is accelerating rapidly, with YouTube-style viewing expected to exceed public service broadcaster consumption within five years. This shift is redefining consumer behaviour and requires producers and broadcasters to think differently about formats, storytelling and monetisation. More of that to come. Given the challenging market dynamics we've outlined, 2025 was a year where we acted decisively to strengthen the long-term resilience of studios. We addressed unprofitable labels, turning around those with potential and closing those without a realistic route to profitability. We also focused on sustaining long-running IP as returning series remain the most reliable revenue stream in an uncertain market. Extending the life of these shows supports cash flow and maximises the value of existing brands. We also prioritised development where demand is strongest. With commissioners becoming more selective, concentrating spend behind genres and buyers with clear demand signals ensures our pipeline remains aligned to the market. We also secured continuity of core creative leadership, which is critical in a risk-averse market where trusted teams carry greater weight. Retaining key leaders gives studios stability, credibility and the ability to continue delivering at the highest standard. Finally, we began exploring capital-like routes to future growth, recognising tighter industry spend and limited investment capacity across the sector. Finding more flexible, lower risk pathways into new growth opportunities is a priority. Building on that, a major priority for 2026 is ensuring STV Studios is set up for scalable, sustainable drama growth, where demand remains strong and our commissioning relationships give us a clear advantage. We already have live commissions with the BBC, Apple TV, Netflix and Channel 4, exactly the kind of high quality, high impact titles that continue to be commissioned even in a tighter market. Drama remains one of the most resilient genres and demand for premium scripted storytelling is projected to grow. A key enabler of this growth will be our drama pods model. Small focus partnerships with commissionable writers, producers or on-screen talent that allow us to scale scripted output in a financially disciplined way. Pods give us the flexibility to co-develop projects with new creative voices while leveraging the infrastructure, systems and production expertise of our existing labels. This broadens our creative reach, strengthens the pipeline and positions us well with both UK broadcasters and global streamers. Under these partnerships, SCV Studios will provide targeted development support and the scale of our production infrastructure. Any greenlit projects under this structure will be co-produced with one of our existing drama labels, ensuring meaningful participation in future IP and production upside. More details on Dramapod partnerships will be following very soon. And as we continue to position SCV Studios for scalable growth, another opportunity we are exploring is the digital-first content market, an area where our creative capabilities, our IP track record and agility give us a real strategic advantage. Our early investment in Fan Club in May 2025 has already given us a valuable insight. That experience is helping shape our thinking as we assess the best route into this high-growth space. The opportunity is compelling. Producers with strong storytelling capability are increasingly well-placed to create their own digital-first IP and the UK addressable market is already worth over £1.6 billion, with analysts forecasting around 10% CAGR through to 2030. What makes this particularly attractive is the revenue model. Digital-first IP can generate scalable advertising income alongside direct-to-consumer revenues, opening access to new high-margin commercial streams outside the traditional commissioning cycle. We will approach this opportunity in a disciplined, capital-light way and will share more detail later in the year once the next phase of evaluation is complete. As we bring these themes together, this slide captures the core of our long-term value creation strategy, built around two engines, the audience division and the studios division. We are also committed to maintaining mass commercial audiences, which remain the backbone of our advertising proposition. Sorry, let me go back. In the audience division, our focus is on growing digital revenue through stronger monetization of STV player, expanded addressable formats, and the new pathways outlined earlier. We are also committed to maintaining mass commercial audiences, which remain the backbone of our advertising proposition. Maximising reach, especially as viewing fragments, preserves the scale advertisers value most. We are accelerating diversification through audio, with STV Radio giving us daily reach and new inventory to attract additional advertiser categories. Underpinning all of this is disciplined strategic cost management, ensuring we operate efficiently while still investing in the areas that drive growth. On the studio side, we continue to leverage what makes our production business distinctive. Our creative leaders have deep customer relationships, an asset that matters even more in a cautious market. We remain committed to growing returnable international IP, the most valuable and reliable revenue stream in content production. We are also exploring digital first IP where scalable advertising and direct to consumer models open high margin opportunities outside of traditional commissioning. We are managing costs carefully to ensure every label and investment supports the long-term health and ambition of the portfolio. Taken together, this strategy creates a cost-optimized, high-reach video and audio business alongside an international content arm. This allows SDV to remain resilient in the short term, more diversified in the medium term, and well set for long-term growth. In terms of outlook, we remain cautious about the near term macroeconomic environment, which continues to create uncertainty for both advertisers and commissioners. Advertising recovery is still uneven and the pace of commissioning remains slower than historic norms. That's why continued cost discipline is essential. The work already done to streamline operations and reshape parts of the business give us a stronger foundation, but we will stay disciplined. At the same time, 2026 offers reasons for optimism. The expanded Men's Football World Cup provides a major audience moment that has historically delivered strong advertiser demand and a wider schedule uplift. We will also benefit from the launch of STV Radio and the rollout of new digital advertising formats, both of which broaden our commercial footprint and open new revenue pathways. And our STV news proposition on air and online strengthens our public service role while helping us engage audiences in new ways. On the content side, we have new and returning IP for both UK and international customers, reinforcing the resilience and capability of STV studios. We have also secured our first unscripted commission for a US streamer, which we will announce in the coming weeks. The broader media landscape is changing quickly and while that brings challenges, it also opens opportunities for companies that can adapt with agility, diversify revenue and play to their strengths. We believe STV is well positioned to do exactly that.