STV Group expects total advertising revenue to be down by around 2% for the full year, delivering what it called "resilient performance" and growth of circa 8% compared to the pre-Covid year of 2019.
Nine-month advertising revenue was down by 3%, in line with expectations, while third quarter advertising revenue fell by 17% as UK economic uncertainty led to caution in the market.
The fourth quarter has seen a stronger performance, boosted by I’m a Celebrity and the FIFA World Cup, with the forecast suggesting advertising revenue will only be down 1% against tough comparators from 2021.
The group expects regional advertising to perform broadly in line with national advertising for the year and video on-demand advertising on STV Player to continue to deliver good growth.
STV Studios’ growth momentum also continued during the period, with around £55m worth of revenue now secured for 2023 - significantly ahead of a target to quadruple revenues to £40m by 2023.
It now has more than 30 new commissions secured this year - double the total for 2021 - and previous full year guidance is confirmed, with around £25m in revenues and at least £1m operating profit.
I’m a Celebrity was the most watched TV series across all UK TV channels in 2022, and STV Player’s most streamed series ever with more than three million streams. England’s World Cup quarter final defeat to France delivered STV the highest peak-time audience in Scotland across all channels this year, of 1.6 million viewers.
The tournament is already STV’s most streamed event ever with over six million streams so far - more than double that of last year’s Euros.
STV chief executive Simon Pitts said: “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, director and research analyst at Panmure Gordon, commented that advertising turned out a little softer than early September estimates, but given the level of volatility and uncertainty, it was a lot closer than many would have thought.
“Revenues edge down 5.1% with mitigations limiting the impact on our earnings estimate to just 6.5%, meaning that profit is almost flat (-1.5%) against the record FY21.
“For a year where huge inflation has impacted the world and some expected an advertising market collapse this is a good result,“ he continued, adding: “Looking forward to 2023 we attempt to calibrate our expectations given the recent trading information now available and take a view on likely mitigation activity.“
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