Another low. But still further to fall. |
Back at COVID lows at the close last night. Advertising outlook remains poor. Studios v uncertain post 2025. And costs just eat away at profits. VOD partnership on sport pretty much irrelevant in that context as trivial revenues at stake. |
STGV does seem to be doing well despite the costs of the pension bailout.
DYOR. |
A very exciting partnership for STV. |
New partnership presumably adding to STGV bottom line :-
A new partnership between sports provider Premier Sports and streaming service STV Player will bring together all the heart-pounding, edge-of-your-seat moments that unite live sports, TV drama and soaps - in one place. The two have joined forces to offer viewers an exclusive and competitively priced package of top-flight sports plus ad-free high-quality drama box sets, true crime documentaries and entertainment juggernauts via STV's streaming platform, STV Player.
For the price of a standalone Premier Sports package, viewers who sign up via STV Player will also become STV Player+ subscribers. They'll be able to access three 24/7 live Premier Sports channels (Premier Sports 1, Premier Sports 2 and LALIGATV), plus thousands of hours of UK and international TV shows ad-free and downloadable. The combined service makes this both a unique and compelling offering in the market. |
The Richard Staverly (Harwoods) interview points out they have been boosting their production arm and it appears to be doing well. |
STV Player viewing actually fell in H1 2024, the most recently reported period, but you are right that it is generally on an upward trend. But for STV - and ITV and Channel 4 and all established broadcasters - digital growth is not enough to make up for linear decline. And digital advertising is shared with a whole bunch of new players, including Netflix, Amazon, Disney and the rest. That is why - even if 2024 was up marginally following double digit decline in 2023 - STV's total ad revenue will resume its downward path. |
Just a point STV Player has 5.7m registered users & usage is up 28% year on year and at peak times STV is the most streamed channel in Scotland.
To be fair to STV they have a very strong audience in Scotland. It's true to say terrestrial is diminishing but everyone is just moving to STV Player or ITVX anyway so I cannot see the issue. |
Biggest sale for a while today sub-£2 just before the close. Interesting to see who that was. |
Obvs talking his book, but odd to be relaxed by climbing debt in current environment. He's right that looking past the pension deficit, STV makes a decent return today, but that deficit won't be paid off until 2030. Who will be watching live telly then? And will STV even have a VOD deal with ITV (current one ends 2029)? 2025 may be ok for STV Studios given bunching of commissions, but who knows for 2026, let alone 2030. I suspect year-end will be ok given commissioning bulge, but shares fade again thereafter as reality dawns. £1.50 a fair price. |
Some really interesting comments from Richard Staveley of Harwood capital who are on the shareholder register (from 56.36m): |
Not a great 6 months for the share price, but still above this time last year. Further to fall over next few months I suspect. |
You are 100% right - lots of merit in ITV buying STV, just as it has bought UTV, Channel, HTV and all the rest. I am just not sure it fits ITV's priorities right now - they are under pressure to show progress diversifying away from regional broadcasting into ITVX and Studios. Buying STV is out of sync with that strategy. Maybe if a new ITV CEO came in that might change, but not under current management. |
I disagree with your comment I think there is a great deal of merit in finally consolidating the ITV franchise. Lots of synergies and value in gaining the last piece of the jigsaw. (But that my opinion).
ITV do not seem to be on a massive acquisition spree, and indeed all they can muster with all their spare cash is a share buy back scheme. Surely taking out STV is going to be peanuts for them at this level (even if they just offered ITV paper). |
ITV has other fish to fry. No-one else would touch it with a barge-pole. Bull case for independent STV is that it is still profitable when - finally - pension payments cease in 2030. But on current course, it's a bust well before then. Debt already up c£40m in three years and climbing further (with or without the dividend). Acquisitions have been a hubristic disaster. First rule of business: don't run out of cash... |
Sounds like tine to sell up to ITV or Canal+. Cannot see STV lasting much longer as an independent. |
This business is in way more trouble than it looks on surface. Debt is climbing fast, but disguised at H1 by temporary working cap inflows. Even with flat profits this year and next, debt climbs further given pension payments, interest, acquisition costs.... Could easily get close to covenants and jeopardise refinancing. So the dividend will go entirely or be trimmed. |
2%-3% ad growth means net ad revenues will be down given the new commission paid to ITV. With costs creeping up, broadcast and online profits likely to fall. Studios is a black box, but lack of any guidance either way suggests flattish yoy (= well down ex-acquisitions). Overall flat profits will mean further increases in debt and interest payments. And next year ads will be down in H1 at least given absence of Euros, which could threaten the dividend. Hard to see why shares have come back... |
"The acquisition strategy in STV Studios is helping us to deliver in a tough market"!? Oh dear, sounds like more shareholders' money being splurged on failing production companies. More of the same. Share price halved before, why not halve it again... |
 Strong performance today, but a few oddities in their statement. Advertising was up 15% in H1, up 5% in Q3 and will be down 10% in Q4. But that adds up to 2%-3% for full year? That maths just doesn't work.
Broadcast is in decline. Growth this year will come off next, with no big sporting event. Likely to be down >5% and maybe more than 10% in 2025.
Digital is really just extension of broadcast - ITV supply the programmes and the advertising. Not really a platform in its own right. Digital viewing was actually down in H1 with no update today.
No more guidance on Studios, but forward order book is down. It will probably come in this year in line with 2023, but only thanks to the addition of Two Cities, which really is not a very good performance. And big chunk of Two Cities order book already been and gone with Amadeus having wrapped.
Note also STV referring to more of its Studios work as 'producer for hire' work for streamers. That means one-off production fee, not long-term benefit. Looks like most of STV's order book falls into this category. |
Down below £2 again, implying market cap under £100m. But with underlying debt approaching £40m and >£50m of pension payments, that is still a 10x multiple vs EBIT at £20m, so may well fall further. |
I just think these guys need to sell up to ITV and let's just take ITV paper...no point dragging this out any longer as an independent. |
Known costs of Greenbird to date - £24m consideration, £4.4m for put option to buy out Crackit, another £6m to buyout Tuesday's Child, acquisition costs £2.4m, integration / restructuring costs £1m = >£35m and climbing. All this spend to bolster a production arm which lost money so far in 2024 (with the only profits coming from yet another new acquisition Two Cities). Makes SMG acquisition of Ginger Media all those years ago look like good business... |
Pension update v disappointing: still on hook for funding at same level, despite quadrupling of discount rates massively reducing liabilities. Not sure what their investment strategy has been... |
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