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Investing.com -- STV Group plc (LON:STVG) shares plunged over 23% after the U.K. media company warned that its full-year 2025 revenue and profit would fall "materially below consensus" due to deteriorating advertising and commissioning markets.
The company now expects full-year revenue to range between £165 million and £180 million with an adjusted operating margin of approximately 7%.
This significant downgrade comes as both of STV’s key business segments face mounting challenges amid worsening macroeconomic conditions in the U.K.
"The deteriorating macroeconomic backdrop continues to lower business confidence impacting both markets in which we operate," said Rufus Radcliffe, CEO of STV Group.
"We are proactively responding to market conditions through a combination of investing in targeted future growth initiatives aligned with our long-term strategy and identifying efficiency and cost saving opportunities across the business."
STV’s Audience division, which includes its broadcasting and digital operations, now forecasts revenue between £90 million and £95 million with an operating margin of 13-15%.
Total (EPA:TTEF) advertising revenue for Q3 2025 is expected to decline approximately 8%, with July down around 20% due to tough comparisons with last year’s men’s Euro 2024 tournament.
The company’s Studios division has been hit particularly hard, with revenue now projected at £75-85 million and an operating margin of about 4%.
The forward order book has fallen to £54 million from £66 million in April as commissioning delays and cancellations impact production schedules.
In response, STV has identified additional cost savings of £750,000 for the full year, bringing its total 2025 savings target to £2.5 million.
The company plans to provide further updates on cost-cutting initiatives at its interim results in September, with more savings expected in 2026.
Despite the current challenges, STV reported that its strategic initiatives, including the establishment of an audio business and streamlining of operations, are progressing as planned.