STV sends out strong signals for 2023 as advertising market displays 'further resilience'

STV, the Glasgow-headquartered broadcasting group, said the advertising market was displaying “further resilience” as it delivered an upbeat outlook for the year ahead.

Releasing a trading update, the group told investors that total advertising revenue for the full year 2022 was expected to be down just 2 per cent on 2021’s record year and up 8 per cent on 2019. It said a strong audience performance had boosted advertising in November and December, driven by I’m a Celebrity and the football World Cup tournament. STV Studios’ growth momentum is continuing, with some £50 million to £55m in revenue now secured for 2023.

The firm noted that England’s World Cup quarter final defeat to France delivered STV the highest peak-time audience in Scotland across all channels this year, with 1.6 million viewers. The tournament is already STV’s most streamed event ever with in excess of six million streams so far, over 50 per cent ahead of last year’s Euros.

The STV Studios business has seen more than 30 new commissions secured this year, double the previous year. Prior full-year 2022 revenue guidance of £20m to £25m was confirmed in the latest update, generating “at least” £1m in operating profit. Additionally, the group confirmed improved studios guidance for 2023, with secured revenues now at £50m to £55m, significantly ahead of a target to quadruple revenues to £40m by 2023.

STV chief executive Simon Pitts said: “STV has performed strongly in 2022 with advertising revenues expected to finish only 2 per cent behind 2021’s record performance and 8 per cent ahead of 2019. On screen we have enjoyed an excellent end to the year, with I’m a Celebrity proving to be the biggest TV series of 2022, ahead of Strictly Come Dancing, and the World Cup STV’s most streamed event ever.

“While we remain mindful of the ongoing macroeconomic uncertainty, we are becoming a more resilient and diversified business that is well placed to take advantage of the growth in demand for streaming and global content. Our recently announced partnership with ITV significantly strengthens our STV Player content and advertising proposition, while STV Studios continues to make great progress towards its goal of becoming the UK’s leading nations and regions production company.”

Johnathan Barrett, an analyst at brokerage Panmure Gordon, said: “[Second-half] advertising has turned out a little softer than our early September estimates but given the level of volatility and uncertainty a lot closer than many would have thought.”

Last week, STV said it had agreed an “enhanced” content sharing partnership with ITV that it believes will meet the viewing needs of the streaming age. The long-term agreement will see STV’s streaming service, STV Player, take exclusive Scottish rights for a range of ITVX original and premiere content over the coming years. This includes UK original dramas A Spy Among Friends and The Confessions of Frannie Langton, both launching with immediate effect on the ITVX video-on-demand service and STV Player, and other titles such as Nolly, starring Helena Bonham Carter as the iconic soap star Noele Gordon, and Litvinenko, starring David Tennant in the title role.