In This Article:
Release Date: March 11, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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STV Group PLC (STU:3YC) reported a 12% increase in total revenue for 2024, reaching 188 million, with all main revenue streams showing growth.
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The company's diversification strategy has made it more resilient, positioning it well for future market recovery.
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STV Studios achieved record revenue from a wide range of customers, maintaining its position as a top 10 UK indie.
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Digital revenue grew by 8% year-on-year, with STV Player seeing a 13% growth in registered users and a 36% increase in subscribers.
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The company has implemented strong cost control measures, achieving 1.9 million in savings against a target of 1.5 million for 2024.
Negative Points
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The advertising market remains challenging, with national linear advertising expected to decline by 5% in the first four months of 2025.
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The introduction of HFSS legislation in October 2025 could impact advertising revenues, though the full effects are not yet clear.
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Adjusted operating margin decreased slightly to 11% due to growth in lower-margin studios and the impact of National Vod commission.
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The Scottish Government's reduced marketing spend led to a 40% decline in related revenues for 2024.
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Cost inflation, particularly salary inflation and increased employer national insurance contributions, presents a significant challenge to the company's cost base.
Q & A Highlights
Q: Can you provide more details on the green shoots in commissioning and the impact of HFSS regulations? A: (Unidentified_15) We have a strong portfolio of 21 labels covering all main genres, and we are seeing positive conversations across these areas. Regarding HFSS, the implementation details are still unclear, but it will only affect the last three months of 2025. We are engaging with customers to explore alternative products that won't be affected by these regulations. (Unidentified_13)
Q: How is the increased scale of STV Studios helping in acquiring new commissions? A: (Unidentified_15) The expansion to 21 labels has enhanced our ability to scale internationally. We have new versions of shows in multiple territories, such as "Bridge of Lies" in the U.S. and "Lego Masters" in over 20 territories. This scale allows us to better leverage our fixed cost base and improve margins. (Unidentified_12)
Q: Can you explain the revenue drivers for STV Player? A: (Unidentified_13) 75% of the revenue comes from VOD, with ITV as our national VOD sales agent. Our revenue growth is tied to ITV's growth. Other revenue streams include sponsorships, subscriptions, and display advertising. Our sales team has been effective in identifying sponsorship opportunities. (Unidentified_10)