Stv Group Stock

Hi, everyone.

Thank you very much for joining us for our 2026 interim results. I will start with an overview, followed by the financial highlights from Lindsay, and then I'll do the strategic update and summary, followed by Q&A. Our first half performance was in line with expectations. Despite a difficult external environment, the Audience division performed strongly.

We successfully launched STV Radio and the growth in higher-margin advertising revenue, the benefit of the World Cup and cost savings helped offset the impact of significantly lower activity in Studios.

The prolonged commissioning slowdown has also resulted in a noncash impairment charge in Studios. This reflects a more cautious assessment of current market conditions and future cash flows. Advertising visibility remains limited, commissioning decisions remain slow, and we are continuing to prioritize financial flexibility. Quarter 3 total advertising revenue is forecast to be down 5%, and no interim dividend is proposed. However, we are focused on the areas we can control.

We have taken decisive action on costs and cash generation. STV remains a strong and increasingly diversified business with market-leading audience brands, a proven track record in content creation and multiple avenues for future growth. We are positioning the business not for a return to the market of the past, but for the opportunities we see in the market tomorrow. And now over to Lindsay.

Thanks, Rufus. I'll kick off with a summary of the key financials for the first half, which are in line with the trading update that we issued in early June. The group generated revenue of GBP 66 million in the first half of the year, down 27% on the prior year. Within this, total advertising revenue was GBP 48 million, up 5% and driven by a strong national ad market performance around the World Cup. Studios revenues were lower than the first half last year with H1 2025, including significant revenues in relation to scripted programs that don't tend to occur in consecutive periods.

The commissioning market also remains subdued with even green light processes for returning series protracted. The regional advertising market also benefited from the World Cup, albeit to a lesser extent in pound terms, but saw much tougher underlying conditions than national for the first time in a while. Digital revenues grew 13% to just over GBP 12 million and includes the first contribution from STV Radio, which has gotten off to a strong start. Adjusted operating profit of GBP 5.9 million was down 12% on the prior year with an improved operating margin of 9%.

Adjusted EPS at GBP 0.071 per share was in line with the prior year as a result of higher losses attributable to minority shareholders in certain production labels. Total net debt at just under GBP 43 million was down on the start of the year, well within our facility limit of GBP 75 million and with key financial covenants also with significant headroom. Moving to the group P&L. There are a few points to highlight. Profitability in the Audience division was up 21% on the first half of last year, benefiting from those high-margin World Cup adds. This profit performance also reflects the impact of successful execution of our restructuring program announced in September last year.

And you can also see cost savings coming through as a reduction in corporate costs. The Studios' loss of GBP 3.2 million is in line with our guidance in June and reflects the current challenging and evolving commissioning market. These market conditions have impacted the short to medium-term outlook for the business through slower decision-making on commissions across the board, less security on over advanced developments or soft green lit projects and higher levels of competition for a limited number of commissioning slots. As a result, we've recognized a noncash impairment of GBP 25 million in the first half of the year, the largest element of which is a goodwill impairment of GBP 17 million.

A full breakdown of the adjusting items is included in the appendices. Finance costs are down year-on-year because of timing differences on unrealized FX gains and losses in the prior year. Our interest on borrowings, which is the largest part of the balance is the same as last year at GBP 1.8 million. Turning to advertising revenue. The table on the left shows the performance of each main advertising revenue category in Q1 and Q2 this year.

And you can see the contrast in year-on-year comparators in Q2 driven by the World Cup in June. When we spoke to you back in March, we talked about the strength of the World Cup and the boost that it would be for advertising markets. What we didn't know at the time was whether it would be a positive stimulus for a wider recovery or whether macro factors would persist and conditions post the tournament would return to Q1 levels.

While we have very limited visibility, our Q3 guidance for TA is down around 5%, and so this would suggest that a wider recovery is not yet with us. In terms of individual category performance, regional is a bit of a standout as it's performed better than national for many years, driven by the success of the STD Growth Fund. It's definitely a tougher market at the minute, not in terms of fewer brands advertising with us, but in total campaign spend, which has been pulled back given broader uncertainty.

This next chart shows the main moving parts in adjusted operating profit year-on-year. Most of these I have already mentioned, but a couple of points are worth picking out. The first is the radio performance, which is in line with our business plan. The loss in the first half of the year is because we couldn't appoint national sales representation until our first RAJAR listening numbers were published. Our debut RAJAR hours were released in early August and were ahead of expectations.

They are a great go-to-market for Bauer, our recently appointed national agent. I'd then highlight the impact that the mix of scripted and unscripted programming can have on profitability in the Studios business, where we had a couple of streamer dramas last year, but not this year. And while we've talked a lot about the challenges in the market and specifically unscripted before, it's good to see that our overall unscripted profitability has improved a little year-on-year as we continue to seek efficiencies and ensure our portfolio is best placed to face off to the market.

I'd also pull out the cost savings bar, which shows the improved profitability from the restructuring program we implemented in Q4 as well as other savings. And in terms of that restructuring program, this was group-wide with around 60 people leaving from across the business. Our core principle was to seek savings and efficiencies without damaging our core operations, and we believe we've achieved this. Savings associated with the changes to our news commitments approved by Ofcom in the first half will start to come through in the second half of the year following the launch of our new FTB News at 6 in July.

Turning to cash and net debt. The group's total net debt at the end of June was just under GBP 43 million and equivalent to leverage of 2.4x. Interest cover was 5.5x with both metrics well within the covenant limits. Production financing loans have been repaid during the period as cash has been collected from commissioners and tax credits received. The loan amounts drawn down at the end of June are for new facilities rather than amounts outstanding on those in place previously. We expect net debt to remain at or around this level at the year-end and are guiding to a range of GBP 40 million to GBP.

On pensions, we continue to see the accounting deficit reduce. Our next triennial valuation is due at the end of December, and we've had early discussions with the trustees to rebalance the schedule of contributions to alleviate pressure on cash during 2027. Our previous schedule of contributions assumed a catch-up payment of GBP 21 million across 2027, which we've now evenly phased over the remainder of the recovery plan.

Our new profile of contributions sees us pay GBP 8 million in December 2027 and GBP 10 million per annum thereafter to the end of December 2031, a short extension to the recovery plan of 1 year. And this last slide looks to pull all the guidance together onto a page. Most of it you've heard in the last 10 minutes, but it's worthwhile pausing to talk about our Studios' guidance for this year and next.

There are a small number of key significant commissioning decisions that have been delayed this year with a resultant impact on overall profitability for the division. We expect the division to be profitable in the second half of the year as it usually is, but our full year expectations are now for a breakeven position.

Looking ahead to 2027, profits are subject to the timing and ultimate decision of a small number of individually material commissions, each of which could have a meaningful impact on the outturn for the year. I'll now hand back to Rufus to take you through the strategy update and outlook.

Thank you very much, Lindsay. So now having taken you through the financial performance, I want to focus on how we are responding. We are not assuming that existing markets simply recover. We are adapting the business to the environment we face, scaling areas showing momentum and remaining disciplined about where we allocate capital.

On this slide, you can see the organizing principles for our strategy, providing clear direction while allowing us to respond to an evolving market. Firstly, in our Audience division, we are maximizing reach and engagement across broadcast, streaming, news, audio and social. This gives us a wider audience footprint and broader proposition for advertisers. And in Studios, we are focusing the portfolio on the areas with the strongest prospects in the market, returnable IP, international customers and selective digital-first opportunities.

And thirdly, across the business, we are aligning our cost base and capabilities with our priorities. This is about building a broader business while protecting cash, improving returns and preserving our ability to invest. STV continues to be Scotland's leading platform for audiences. We delivered 99% of the top 500 commercial audiences in the first half of the year, and STV Player had its best 6 months ever with more than 40 million hours of content watched on the service.

The World Cup was huge. 3 million Scots watched across STV and STV Player, generating more than 39 million viewing hours, peaking with Scotland's game against Morocco. And this matters commercially. In an increasingly fragmented media market, STV still brings large scaled audiences together whilst also allowing viewers to watch in a way that suits them. And now to STV Radio.

On this slide, a quick reminder of the strategic rationale for launching the service. The rationale was simple. Radio is highly complementary to television. It allows us to reach audiences at different points in the day while filling a clear gap in the market for Scotland's only national commercial radio station produced in Scotland for Scottish audiences. TV is also highly complementary for advertisers, but more of that to follow.

The station has got off to a strong start. After only 6 months on air, it is reaching 139,000 weekly listeners and has already become a top 10 commercial station in Scotland. The 9.3 hours of average weekly listening is particularly encouraging because it shows that we already have a substantial loyal audience. Radio gives us another way to reach Scottish audiences, expands the inventory we can offer to advertisers and also creates opportunities to develop content across audio, TV, social and digital.

Our STV Radio football podcast has already amassed 21 million video views. We've had 20 million video views of STV Radio content on our social channels. And there's also now a dedicated STV Radio Football takeover show on STV every Friday night. It is still early, and our focus is on growing awareness and increasing reach, but we are ahead of plan and pleased with where we are at. You can see here the impact of our diversification on audience reach in this snapshot from April of this year.

On the left-hand side of this slide, you can see amongst all adults, STV and STV Player combined reached 71% of people in Scotland, but this figure increases to 77% when you add in radio, digital news and social platforms. And on the right-hand side, when you look at under 45s, the impact is even more significant with reach increasing by around 10 percentage points. We are focused on protecting the reach we have today, but also ensuring that STV remains relevant to younger multi-platform audiences in the future.

Now to news. We were granted permission by Ofcom to update our news licenses requirements for the first time in 20 years and rolled out our new 600 p.m. programs on the 13th of July. It has gone well with share and volume of viewing both up since we implemented the changes. The changes have also allowed us to put news on a sustainable cost footing, but importantly, also allows us to scale up our digital news proposition.

We've been doing this throughout the first half of the year with digital video views up 31% year-on-year, helped by some amazing stories of the Tartan Army in Boston during the World Cup. So not only is STV Scotland's leading platform for audiences, but that is also why we are Scotland's leading platform for advertisers.

And we now have more ways than ever to talk to -- advertisers now have more ways than ever to talk to their customers through STV. Not only do we have an ever-growing range of advertising products, but all the evidence is that TV remains the most effective advertising platform, which when combined with radio, increases effectiveness by a further 20%, and effectiveness ultimately is every advertiser's #1 KPI.

And you can see that some of our new ad products have had a strong market reaction. We have 25 active brands using pause ads, which has served when a viewer presses pause on STV Player. And we have 37 active brands on STV Radio and I'm particularly pleased that 10 of those have never advertised with STV before, encouraged now by the lower STV Radio price point, unlocking a new part of the market. And we have a record 66% of brands on our register who are now using more than one STV platform.

And there's more to come during the second half. STV Adapt, our new AI-enabled targeted advertising has been designed to make it easier and more cost effective for SMEs to access targeted advertising through STV. Technical development is well advanced ahead of the planned Q4 rollout. And we are also developing STV Win, our competitions proposition, which will help deepen audience engagement and is, of course, a new revenue stream as well.

And now to Studios. The market remains challenging, and that is reflected in today's results. The U.K. commissioning market remains well below recent levels and decisions are taking longer across the industry. At the same time, viewing continues to shift towards digital platforms, changing how content is commissioned, distributed and monetized. That creates both challenges but also opportunities for users and it's reflected in our performance this year. Our response is set out on this slide.

We're focusing development spend on returnable IP because successful returning brands create longer-term value. We're broadening our customer base through relationships with international buyers and streamers, and we're also building our understanding of digital-first content, giving us valuable capability and insight in a fast-growing area of the market. At the same time, we're maintaining strong discipline around costs, cash generation and investment. We're actively reviewing the portfolio and directing resources to the opportunities with the strongest long-term potential.

There are really attractive opportunities in returnable IP, growing international customers and digital. For now, our priority is improving performance and creating the capacity to invest more meaningfully as conditions improve. So a bit more on returnable IP, which is a clear Studios' priority. It has helped underpin the business as market conditions continue to be challenging.

This slide shows the quality of our unscripted business, where despite the difficult market backdrop, we see resilient demand for our returning brands. We have an established portfolio across entertainment and factual. And only last week, we announced the recommission of both Bridge of Lies and Celebrity Catchphrase.

Our development spend is always judged against its potential to create repeatable formats and enduring IP. Value develops as a successful program returns, scales and creates future rights opportunities. You'll also see on this slide, Blue Lights, one of the most popular dramas on British TV, which returned for its fourth series this autumn on BBC1 and BBC iPlayer. Our priority also continues to be to broaden our customer base beyond U.K. commissioning, and we have made real progress.

The Witness was our first drama for Netflix and was the most streamed drama in the world for 2 weeks in June on the service. In fact, it was the most streamed program in the world on that service, demonstrating the ability for our content to connect with audiences internationally. Primal Media, one of our labels has secured its first commission for Disney's Hulu, giving us another relationship with a global buyer.

And our partnership with Kevin McKidd, one of the stars of Grey's Anatomy under the Ferryman Films label strengthens the scripted pipeline and gives us access to distinctive creative talent with a truly global profile. These successes do not remove the near-term market pressure, and we should not imply that they do, but they demonstrate that STV Studios has creative capability, relationships and IP that can compete beyond the U.K. market. Our task is to turn that creative progress into more consistent financial performance. And the third focus is on digital-first content.

This is clearly an important and growing part of the media market, but our approach needs to be disciplined and proportionate to our financial capacity. Fan Club, a specialist ad-funded branded content business in which we took a minority stake last year, has helped us build capability, understand platform economics and develop relationships in the creator economy. We are testing where existing STV Studios' IP, talent and genre expertise can translate effectively into digital-first formats and audiences.

You can see examples of early activity on this slide, building a YouTube community around Game of Wool called Let's Get Knitting. Rockerdale, the makers of The Assembly recently announced a new YouTube proposition, The Assembly B-Sides, and Fan Club have delivered some excellent early work for clients, including Vinted and Russell Hobbs. We have a high-quality Studios business with outstanding creative leaders and a track record of creating successful content for broadcasters and streamers.

We continually review our portfolio of labels, but the scale and pace of change in the commissioning market means it's right to take a fresh look at how the portfolio is positioned for the future. The objective is a stronger, more focused Studios business that is aligned with where the market is moving while retaining the creative breadth that has been a long-standing strength of the portfolio.

So bringing the story together, STV is becoming a broader, more diversified business. In the Audience division, we have market-leading reach in Scotland, a strong streaming growth, trusted news service and a promising and growing audio proposition with an increasingly broad proposition for our advertisers. In Studios, we have a production label portfolio with some of the industry's most admired creative leaders with established returnable IP, strong scripted capability and growing relationships with international buyers.

But we are also clear that we must adapt to a more difficult commissioning market as well as move into the digital creator space with discipline. Our priorities are clear: deliver the audience growth initiatives already underway, reshape Studios around the areas where we can win, protect cash and balance sheet flexibility.

While we remain cautious about the near-term outlook, we are confident that the actions we are taking will give us greater resilience and more opportunities to create longer-term value.

Thank you, everyone, for joining today. Good afternoon. I'll start with an overview of full year 2025. Lindsay will then take you through the finance review before I return to cover strategic progress and how we are positioning the business for success. We'll finish with Q&A.

Our full year '25 performance landed in line with guidance. Group revenue of GBP 176.9 million and adjusted operating profit of GBP 11.6 million reflected disciplined delivery in a difficult advertising and commissioning market. Our cost savings program is on track, delivering GBP 8 million of permanent savings by full year '26.

STV Radio launched in January with a strong early response from both audiences and advertisers. We entered 2026 with a clear plan and reasons for optimism with an expanded World Cup, the scaling up of STV Radio and international commissions for our Studios business. We are also continuing to explore opportunities emerging from a rapidly transforming media landscape.

Consistent with our focus on financial discipline, the Board is not recommending a final full year '25 dividend to preserve flexibility and liquidity as trading stabilizes, but intends to return to paying a dividend when it is prudent for the group to do so. Now over to Lindsay.

Thanks, Rufus. I'll just kick off with a summary of the key financials for the year, which are in line with the trading update that we issued in January. The group generated revenue of GBP 177 million in 2025, down 6% on the prior year. Studios revenues remained resilient at GBP 83 million, down only 1% and underpinned by scripted activity with the main driver of the group revenue reduction being advertising, which was down 10%.

The largest component of TAR is national linear advertising, which was down 16%, with regional revenues performing much better, down only 1%. Total digital revenues at just over GBP 20 million grew by 3%. Adjusted operating profit at GBP 11.6 million was down 44% on the prior year, slightly ahead of expectations with an operating margin of just under 7%.

Total net debt was just over GBP 45 million at the bottom end of our guidance range and included a lower value of production financing than this time last year following receipts from commissioners. Moving to the group P&L. There are a few points to highlight. Profitability in both the Audience and Studios divisions was down by 35% year-on-year, with the reduction in high-margin advertising revenues and lower new format sales combined with cost pressures being the main drivers of the decline.

At the end of December, the Studios order book was GBP 33 million, down on the GBP 40 million reported in our interims as revenue has been recognized over the second half. Corporate costs are flat year-on-year as we've offset inflationary increases with savings. The increase in finance costs is mainly due to the reversal of an unrealized FX gain in 2024.

Interest on the group's borrowings was only up slightly as the lower margin payable under the RCF negotiated at the start of 2025 offset the impact of the higher average net debt across the year. In terms of adjusting items, I've included an appendix with the detail. Most of the write-offs were recognized in the first half of the year with the restructuring costs of GBP 1.7 million being the redundancy costs associated with the GBP 3 million cost saving program announced in September and executed over Q4.

We flagged a cost of change of around GBP 2 million at that time, and we've come in slightly lower than that. Turning to advertising revenue. The table on the left shows the performance of each main advertising revenue stream in 2025 compared to both 2024 and 2023, the latter intended to exclude the one-off impact of the euros.

National linear advertising was the poorest performing relative to both years with regional linear turning in a relatively strong performance of down 1% on 2024, equivalent to 2% growth on 2023. VOD revenue growth slowed in 2025 to 3% and was up 12% on 2023.

The final column of numbers in the table is our current outlook for Q1. Generally, we're not seeing any significant change in the advertising market as we move from 2025 into the start of this year. The weaker performance from regional linear that you see in the table is a combination of the particularly strong performance in 2025 with the decision of a small number of larger advertisers to rephase their spend to later this year.

On a more positive note, advanced sales for World Cup advertising and sponsorship packages are going well and give us reasons to believe Q2 will be stronger. This next chart shows the main moving parts in adjusted operating profit. The largest bar is advertising, which drives more than 80% of the profit decline after taking account of the benefit from the underlying contractual arrangements with ITV that sees our program cost move in line with national revenue.

This reflects the operating leverage in the Audience division, which will work in the opposite direction in Q2 when the World Cup is on our screens. You can see a small bar for radio. This was the modest investment we made in the second half of the year to build the station ready for launch in early January.

We achieved this on time and for a slightly lower upfront investment than previously indicated. Profitability in Studios was lower in 2025 than the prior year, driven by unscripted with the drama labels all in active development for streamers throughout the year. The last 2 bars towards the right of the chart reflect changes in the cost base of the business.

Inflation and increased employers' NII are meaningful for the company, but we've more than offset those cost increases with savings. Here, we recap our previously stated position in terms of cost saving targets and how we're delivering against them.

In March 2024, we announced a GBP 5 million annualized target for the end of 2026. We've delivered just over GBP 4 million so far and are on track to hit our target by the end of this year. These savings have been realized across the business, predominantly in third-party spend with some roles impacted through activities, including closure of certain creative labels.

We've made savings in broadcast operations, freelance activity, marketing, post-production facilities and support functions. In September last year, we announced an incremental GBP 3 million cost saving target, of which GBP 2.5 million would be realized in 2026.

The majority of this will be delivered through a reduction in headcount with the necessary actions being taken in Q4 to realize savings this year. Our approach to determining these cost savings was tailored to each part of the business and reflects a process through which we considered the role of each team, whether there are technology advancements that could drive efficiencies and our expectations of future activity levels, underpinned by the decision to protect current and future sources of STV controlled revenue.

The main area where work is ongoing is in news, where we await Ofcom's decision on the changes we proposed to our licensees due after the Scottish election in May. Turning now to cash and net debt. The group's total net debt at the end of the year was just over GBP 45 million, and equivalent to leverage of 2.5x.

Interest cover was 6.1x at the end of the year with both metrics well within the covenant limit. Production financing loans have been repaid during the year as cash is collected from commissioners and tax credits received. The loan amounts drawn down at the end of the year are for new facilities rather than amounts outstanding on those in place previously.

We expect advertising revenue to improve with the World Cup, but that cash won't be collected until Q3, so we anticipate net debt and leverage will go up slightly from the current level at the half year and then reduce again at the year-end, remaining with covenant levels throughout.

On pensions, the accounting deficit reduced to GBP 39 million at the end of the year from GBP 48 million 12 months ago, and we remain on track to achieve full funding on a technical provisions basis by October 2030. We've agreed contribution payment flexibility with the trustees that allow us to defer payments previously due this year into 2027, and we expect to take advantage of this flexibility as group trading remains challenging.

I'll now hand you back to Rufus, who will take you through the strategy update and outlook.

Thanks very much, Lindsay. 2025 was a tough year for U.K. media. Audience behavior continued to shift, macro uncertainty continued and commissioning slowed down. However, we've remained focused on delivering the Fast Forward strategy. In the Audience division, which now brings together broadcasting, streaming and audio under one plan, we have focused on maximizing reach and engagement.

Expanding our advertising proposition through more formats. more data and more activation points and diversifying revenue through digital audio and using the strength of the STV brand and our relationship with audiences to identify new opportunities. In Studios, we are strengthening returnable IP, broadening our customer mix beyond PSBs and developing content with global appeal.

We are also exploring digital content models that open up new monetization opportunities. Across the group, we continue to focus on efficiency so we can invest where it matters while staying resilient. Taking a look at our Audience division. Despite ongoing shifts in viewing behavior, STV continues to have huge scale in Scotland. We reached 75% of Scotland each month. That's 3.5 million people.

We have greater reach than the combined ad tiers of Netflix, Prime Video and Disney+ combined. 97% of the top 500 overnight audiences in '25 were on STV. STV Player, our streaming service also had a record year with strong growth in streaming hours and daily active users. Total viewing did decline in line with market trends, but our scale and brand strength ensure STV remains a highly effective platform for advertisers.

Now to STV Radio. STV Radio launched on the 6th of January and has made a strong early start, onboarding 23 brands, including 5 entirely new to STV, while existing advertisers have increased their advertising investments by adding radio to their media schedules. We are seeing well-established TV clients maintain their TV investment and extend into radio.

C.R. Smith, for example, now sponsors STV Radio's breakfast show as well as our recently launched football podcast alongside its continued sponsorship of STV Sport on television. STV Radio complements TV by offering strong integration with editorial content and reaching audiences in different moments of the day.

Official audience data will be available in August. And now looking at STV News. We are focused on the right news proposition for now and for the future. Ofcom is consulting on our proposal for a simplified 6:00 p.m. news program and accelerated digital expansion to ensure we remain relevant and can grow our audience at a sustainable cost base.

Digital news, as you can see on the right-hand side, grew by 350% in 2025. 2026 will be a major news year for Scotland with Scottish Elections and the Men's FIFA World Cup. Now looking at our advertising proposition. STV is Scotland's leading advertising platform, reflected in the scale and diversity of our customer base.

Every brand you see on this slide chooses STV for the strengths of our reach, the trust in our environment and the flexibility of our formats. In 2025, 318 brands advertised with STV. We have the combination of mass reach alongside highly targeted capabilities. Advertisers can buy broad audiences through linear, precision audiences through STV Player and increasingly integrated campaigns across all of our products.

TV also continues to outperform on marketing effectiveness. Independent studies consistently show it is the most effective medium for both short-term results and long-term brand growth. And when TV is combined with radio, now part of our growing portfolio, it delivers a proven 20% multiplier effect, increasing overall ROI.

So STV starts from a position of strength, a trusted, effective scaled platform with deep advertiser relationships. We are now building on that strength by opening up new digital opportunities that make STV accessible to more brands, more budgets and more categories than ever before.

Here's a look at our expanded digital proposition, opening STV up to a broader universe of advertisers and budgets. Pause ads on the left-hand side are a great example. Since launching in November, adoption has been immediate with 15 regional brands live on the service. Pause ads offer a high-impact, contextually relevant format and early results show strong appetite for these nonintrusive but highly visible ad moments.

When a viewer hits pause, an ad is served. STV Adapt in the middle takes us into a new part of the market, a low-cost SME entry point using AI-generated creative to remove production barriers that kept smaller businesses out of TV quality advertising. Currently delivered through STV Player, it will scale further through linear addressable in H2 2026, enabling more precise targeting across IP viewing on the STV linear channel.

Pilot results from the 4 brands you see on this slide have been impressive. And then STV Radio strengthens our cross-platform proposition, delivering new digital revenue. It provides a route into STV for brands who are not natural buyers of TV airtime, broadens our customer base, drives incremental spend and opens up new commercial opportunities.

Together, these innovations expand our commercial footprint, diversify revenue and create digital advertising products that complement our broadcast offering. They position STV strongly for structural market shifts, enabling advertisers of all sizes to access STV's trusted brand-safe environment for flexible, data-driven and efficient advertising.

So as we look ahead to 2026, our focus is clear: maximizing STV's reach and converting that strength into sustainable revenue growth, and we have 4 key objectives. Firstly, in terms of audiences, maximizing reach is essential to our competitive position. The World Cup will help reengage viewers across the schedule and STV Radio adds a new daily touch point, strengthening our multi-platform footprint.

Secondly, we are growing digital revenue. Pause ads, adapt and linear addressable give us a strong engine for monetization and will help us deepen commercial partnerships across linear, VOD and audio. Thirdly, also expanding and diversifying revenues. Competitions represent a high engagement, high-margin area, and we will take initial steps into this space in 2026 via STV Radio.

We also see an opportunity through intelligent use of our content archive on YouTube for further diversification, which will also bring a younger and more digital-first audiences into the STV universe. And fourthly, we will do all of this whilst delivering cost savings and structural changes to make the group more efficient and aligned to future growth.

As stated for full year '26, we are on track for GBP 8 million of savings this year. Now turning to Studios. We continue to demonstrate real resilience in a challenging commissioning environment. On the scripted side, we've delivered a strong slate with major partners. Blue Light Series 3 has aired and Series 4 is in production. Amadeus was Sky's most watched drama in 2025.

Criminal Record Series 2 is about to land on Apple TV. And The Witness, our first Netflix show, is delivered and landing later this year. Channel 4 has also commissioned brand-new drama Army of Shadows produced by Two Cities Cities, the same team that make Blue Light, again delivering later this year.

These are premium high-quality titles that reinforce STV Studios' ability to deliver returning series and major new commissions even in a soft market and underlines the strength of our relationship with global broadcasters and platforms. In unscripted, the scale of our returning brands is equally important. We had 17 returning series and 14 new returnable formats, supplying a wide mix of customers.

That breadth is a strategic advantage in a cautious market where demand for reliable, repeatable formats is stronger than ever. We are delighted that Channel 4 announced the recommission of Game of Wool yesterday. Taking a step back, the broader market is clearly undergoing a major adjustment, reshaping commissioning behavior and the opportunities available to producers like STV.

Public service broadcaster spend is under pressure with broadcasters working to tighter budgets, driving tougher commissioning choices and a stronger focus on cost-effective, high-performing content. This structural trend will continue to shape the U.K. market.

In unscripted, buyers are becoming more conservative, prioritizing proven repeatable formats over higher-risk ideas. Our strong slate of returning franchises position studios well in this environment. We are also seeing a shift in streamer strategy with global platforms concentrating spend on fewer higher-impact titles that cut through a crowded landscape.

Demand for standout premium content, however, remains strong. In premium scripted, investment continues. Buyers still want high-quality drama and our 2025 commissions demonstrate how important trusted relationships, high delivery standards and a proven track record have become.

Across the board, commissioners are leaning towards established suppliers with consistent performance and the ability to manage production challenges, an area where STV has advantages through operational capability and a strong slate of returning and high-profile titles. At the same time, new opportunities are emerging. Digital-first content is accelerating rapidly with YouTube style viewing expected to exceed public service broadcaster consumption within 5 years.

This shift is redefining consumer behavior and requires producers and broadcasters to think differently about formats, storytelling and monetization. More of that to come. Given the challenging market dynamics we've outlined, 2025 was a year where we acted decisively to strengthen the long-term resilience of studios.

We addressed unprofitable labels, turning around those with potential and closing those without a realistic route to profitability. We also focused on sustaining long-running IP as returning series remain the most reliable revenue stream in an uncertain market. Extending the life of these shows supports cash flow and maximizes the value of existing brands.

We also prioritize development where demand is strongest with commissioners becoming more selective, concentrating spend behind genres and buyers with clear demand signals ensures our pipeline remains aligned to the market. We also secured continuity of core creative leadership, which is critical in a risk-averse market where trusted teams carry greater weight.

Retaining key leaders give Studios stability, credibility and the ability to continue delivering at the highest standard. Finally, we began exploring capital-light routes to future growth, recognizing tighter industry spend and limited investment capacity across the sector. Finding more flexible, lower-risk pathways into new growth opportunities is a priority.

Building on that, a major priority for 2026 is ensuring STV Studios is set up for scalable, sustainable drama growth, where demand remains strong and our commissioning relationships give us a clear advantage. We already have live commissions with the BBC, Apple TV, Netflix and Channel 4, exactly the kind of high-quality, high-impact titles that continue to be commissioned even in a tighter market.

Drama remains one of the most resilient genres and demand for premium scripted storytelling is projected to grow. A key enabler of this growth will be our drama pods model, small focused partnerships with commissionable writers, producers or on-screen talent that allow us to scale scripted output in a financially disciplined way.

Pods give us the flexibility to co-develop projects with new creative voices while leveraging the infrastructure systems and production expertise of our existing labels. This broadens our creative reach, strengthens the pipeline and positions us well with both U.K. broadcasters and global streamers.

Under these partnerships, STV Studios will provide targeted development support and the scale of our production infrastructure. Any Green IT projects under this structure will be co-produced with one of our existing drama labels, ensuring meaningful participation in future IP and production upside. More details on drama pod partnerships will be following very soon.

And as we continue to position STV Studios for scalable growth, another opportunity we are exploring is the digital-first content market, an area where our creative capabilities, our IP track record and agility give us a real strategic advantage. Our early investment in Fan Club in May 2025 has already given us a valuable insight.

That experience is helping shape our thinking as we assess the best route into this high-growth space. The opportunity is compelling. Producers with strong storytelling capability are increasingly well placed to create their own digital-first IP, and the U.K. addressable market is already worth over GBP 1.6 billion, with analysts forecasting around 10% CAGR through to 2030.

What makes this particularly attractive is the revenue model. Digital-first IP can generate scalable advertising income alongside direct-to-consumer revenues, opening access to new high-margin commercial streams outside the traditional commissioning cycle. We will approach this opportunity in a disciplined capital-light way, and we'll share more detail later in the year once the next phase of valuation is complete.

As we bring these themes together, this slide captures the core of our long-term value creation strategy, built around 2 engines, the Audience division and the Studios division. We are also committed to maintain -- we are also committed to maintaining mass commercial audiences, which remain the backbone of our advertising proposition -- sorry, let me go back.

In the Audience division, our focus is on growing digital revenue through stronger monetization of STV player, expanded addressable formats and the new pathways outlined earlier. We are also committed to maintaining mass commercial audiences, which remain the backbone of our advertising proposition.

Maximizing reach, especially as viewing fragments, preserves the scale advertisers value most. We are accelerating diversification through audio with STV Radio giving us daily reach and new inventory to attract additional advertiser categories. Underpinning all of this is disciplined strategic cost management, ensuring we operate efficiently while still investing in the areas that drive growth.

On the studio side, we continue to leverage what makes our production business distinctive. Our creative leaders have deep customer relationships, an asset that matters even more in a cautious market. We remain committed to growing returnable international IP, the most valuable and reliable revenue stream in content production.

We are also exploring digital-first IP where scalable advertising and direct-to-consumer models open high-margin opportunities outside of traditional commissioning. We are managing costs carefully to ensure every label and investment supports the long-term health and ambition of the portfolio. Taken together, this strategy creates a cost-optimized high-reach video and audio business alongside an international content arm.

This allows STV to remain resilient in the short term, more diversified in the medium term and well set for long-term growth. In terms of outlook, we remain cautious about the near-term macroeconomic environment, which continues to create uncertainty for both advertisers and commissioners.

Advertising recovery is still uneven and the pace of commissioning remains slower than historic norms. That's why continued cost discipline is essential. The work already done to streamline operations and reshape parts of the business give us a stronger foundation, but we will stay disciplined.

At the same time, 2026 offers reasons for optimism. The expanded Men's Football World Cup provides a major audience moment that has historically delivered strong advertiser demand and a wider schedule uplift. We will also benefit from the launch of STV Radio and the rollout of new digital advertising formats, both of which broaden our commercial footprint and open new revenue pathways.

And our STV news proposition on air and online strengthens our public service role while helping us engage audiences in new ways. On the content side, we have new and returning IP for both U.K. and international customers, reinforcing the resilience and capability of STV Studios.

We have also secured our first unscripted commission for a U.S. streamer, which we will announce in the coming weeks. The broader media landscape is changing quickly. And while that brings challenges, it also opens opportunities for companies that can adapt with agility, diversify revenue and play to their strengths.

We believe STV is well positioned to do exactly that.

Hello, everybody. Sorry about the delay just to be technical, but we welcome to today's presentation on STV's interim results to the end of June 2025. And importantly, today, we've also announced beyond the results, full details of our response to the challenging market conditions that we're facing at STV. Rufus and Lindsay will share full details of our cost-saving program and the additional measures put in place to protect profitability and provide balance sheet flexibility should it be required.

So despite current headwinds, there are many positives to be taken from today's announcement. STV continues to hold share as the most popular peak time TV channel in Scotland and STV Player recorded its highest ever viewing figures for the first half. STV Studios, including its minorities, has secured 30 new commissions in 2025 year-to-date. And most recently, we won the commission for Army of Shadows, a brand-new returnable drama that's been commissioned by Channel 4. So all good news. STV Radio, a new proposal that we announced recently is on track for launch on the coming -- in the coming months. And that's just a few of the very positive things happening across the business.

We are an ambitious business, and there's a lot to look forward to as we work towards delivering our FastFwd to 2030 strategy. You may also have seen the news this morning that I will step down as Chairman by the end of the year. I've been with the company for almost 5 years, and this feels like an appropriate time to step down and for a new Chair to lead the company as it drives through on the FastFwd strategy. And I'm delighted that Clive Wiley has been appointed as my successor, and I'm going to work closely with Clive over the coming few months to ensure a proper and comprehensive handover.

Clive brings to STV really extensive experience and skills acquired across a broad range of sectors. And I really hope he enjoys his time with the business as much as I have. Having grown up watching STV, I'm really proud to have served as your Chair for the past 5 years. working with a great team to deliver the ambitious and successful diversification strategy, which has built the foundations of the business and will enable us to remain strong. I feel confident I'm leaving STV in due course in very safe hands with Clive, with our strong and experienced Board of Directors and with our exceptional leadership team.

Now I'm going to hand over to Rufus and Lindsay to take you through the details of today's announcement. Rufus?

Thank you very much, Paul, and good afternoon, everyone. Before beginning, I wanted to also thank you, Paul, for everything you've done for STV over the past 5 years, overseeing a period of significant progress and diversification of the business. Obviously, this is your last set of results, and we wish you the very best of luck for the future. The -- but today's interim results are the first following our trading update on the 28th of July. The trading environment in both our key markets, advertising and content has been difficult.

Today, what we want to do is talk in detail about the actions that we've taken and also to reaffirm our long-term strategy and the progress we continue to make, which will build the foundations for future growth. I'll start with the half year results, which obviously are now a while ago. In H1, we delivered GBP 90 million in revenue and GBP 6.7 million in adjusted operating profit.

Q3 total advertising revenue is expected to be down around 8% year-on-year as guided, with October looking similar. Visibility beyond that is still difficult. The Studios order book at the end of August stands at GBP 40 million, reflecting the continued delivery of scripted programming and fewer commissions being secured and added to the order book across scripted and unscripted. This number also excludes brand-new drama Army of Shadows commissioned by Channel 4, which was announced a couple of weeks ago.

We've begun implementing a cost savings program and given limited market visibility, we're not proposing an interim dividend. Despite the headwinds, we are holding guidance for the full year for the group and our 2 divisions. We announced in July incremental cost savings of GBP 750,000. And as a result, we are on track to deliver a GBP 2.5 million saving target this year. As we navigate a challenging trading environment, we have taken clear action to protect both profit and cash. Firstly, we've launched a cost savings program that will deliver a GBP 3 million annual reduction in our cost base. This is incremental to the previously announced target of GBP 5 million for full year '26. Of this, GBP 2.5 million will be realized in 2026 with an estimated GBP 1 million cost of change.

Additional savings are being targeted in news. These require changes to our license, and we are in discussion with Ofcom. We have also agreed flexibility on pension contributions with trustees. The 2030 recovery plan remains in place, and we now have the ability to adjust payment timings across 2026 and 2027, helping us manage cash more effectively. In addition, we have rephased nonessential CapEx, ensuring that investment is focused only on strategically important areas.

And finally, we have secured amendments to our bank facility, providing additional downside headroom and reinforcing our financial resilience. These measures are not just tactical. They are part of a broader plan to ensure STV is focused, resilient and more profitable when market conditions improve. And now to take you through the financial review in more detail, over to Lindsay.

Thanks, Rufus. As I tend to do, I will start with a summary of the key financials for the first half of the year. So the group generated GBP 90 million in revenue in the first half, in line with 2024 as the growth of 13% in Studios offset the decline in audience. The audience decline was driven by total advertising revenue, which was down 10% year-on-year with the 2024 Euros in the comparator, the well-trailed reason for this. The largest component of TAR is national linear advertising, which was down 16% and the regional team delivered a very strong result of 2% growth in the Scottish market.

Total digital revenues were just under GBP 11 million and grew by 5%, driven by VOD. Adjusted operating profit of GBP 6.7 million was down 37% on the first half last year, principally due to the reduction in high-margin advertising revenues. And you can see the impact of this on the adjusted operating margin as well. Studios was breakeven in H1, in line with last year. Total net debt was GBP 35.7 million, lower than the start of the year as production financing facilities have been repaid, and we've seen only a marginal increase in our RCF drawings.

Moving to the group P&L. There are a few points to highlight. Corporate costs in the first half stands out given it's gone up year-on-year. About half of the increase is noncash and reflects the costs of administering the pension schemes that are reflected in our P&L account. And the other main element is for consultancy in support of our FastFwd strategy. The underlying costs of the business are well controlled, as you'll see in the profit bridge in a few slides' time.

Interest on the group's borrowings is in line with last year at GBP 1.8 million. The balance of the finance cost is noncash, and it's a small amount of interest on leases and an unrealized loss on foreign currency forward contracts, which offsets the unrealized gain that we recognized in the second half of last year. In terms of adjusting items, I've included an appendix at the end with the detail. The largest item impacting operating profit is a noncash charge of GBP 2 million relating to the review of our unscripted label portfolio. This is split roughly 50-50 between the write-off of an investment in a minority stake and a separate write-off of development stock following our decision to stop new development in STV Studios Entertainment.

Turning to advertising revenue. The table on the left here shows the performance of each main advertising revenue stream in H1 2025 compared to 2024 and 2023, the latter eliminating the effect of the euros last year. National linear advertising was the poorest performing relative to both 2024 and 2023, with regional linear turning in that strong performance of 2% growth that I referred to year-on-year and was up 3% on 2023. This really is a testament to the quality of the relationships that the local sales team have with their clients and is particularly notable given the national performance.

VOD continues to grow and was up double digit in H1 2025 compared to 2023. Looking to the Q3 outlook, we are maintaining our previous guidance of an 8% decline in TAR year-on-year, but the components of this have changed a little since the end of July. National linear is looking to improve slightly to around 10% down, regional worsening to 15% down and arguably catching up with the broader market performance in H1 and VOD growth is expected to be 8% up. Visibility remains very low. And while we have a view on October, we're not guiding beyond that. In overall terms, we're expecting the October ad market to perform broadly similar to Q3, which is a bit disappointing as we would normally expect to see a seasonal uptick at this time of year.

Shifting division and moving to Studios. The order book trajectory since the start of 2023 is shown on this slide, and you can see that the current position of GBP 40 million reflects the delivery of several large scripted shows over the last 12 to 18 months. At the end of August, the scripted order book was GBP 18 million and so much lower than it has been in the last couple of years as revenue has been recognized. It's a clear focus of the team to secure more commissions to repeat the cycle, and we have a number of ideas in advanced development with commissioners that we expect to hear about in the coming weeks and months.

We recently announced a new scripted commission from 2 cities for Channel 4 called Army of Shadows, which is a sizable production, but it will flow through our numbers a bit differently. That's because it's a co-production with StudioCanal and our revenue will be our share of the production fee rather than STV recognizing the full program budget. So where we might have been adding GBP 15 million to GBP 20 million, say, to the order book, we will recognize a much smaller number, but it will be at a near 100% margin.

In terms of unscripted, commissions have been quiet in recent months, albeit the current order book of GBP 22 million is not far below the average of the last couple of years. Given this context, our expectations for Studios performance in 2026 is broadly aligned with this year as conditions do remain difficult. Our teams are continuing to engage with commissioners, and we're confident that our relationships will enable us to drive growth when the macro improves. But as with the ad market, it's difficult to see when that might happen.

This chart shows the main moving parts in adjusted operating profit year-on-year. The largest bar starting left to right is national linear advertising, which drives more than 70% of the profit decline after taking into account the benefit from the underlying contractual arrangements with ITV that sees our program costs move in line with revenue. This reflects the operating leverage in this part of the business. And so it's the bit that will come back just as quickly when the market improves as it has done many times before now.

Production margin generated in Studios is slightly up year-on-year, but profits are impacted because of the consolidation of labels for the first time following increases in stake from minority to majority in the second half of last year. The bars towards the right-hand side of the chart reflect changes in the cost base of the business. We've direct costs, which have increased year-on-year as a result of higher VOD revenues and increased viewing hours. Inflation and increased employers NI are meaningful for the business, but we've offset most of these cost increases through the savings, which is the large green bar towards the right-hand side there.

Turning to cash and net debt. The group has net debt in relation to its RCF of just over GBP 30 million at the half year, not dissimilar to the opening position. Production financing loans are being repaid as cash is collected from commissioners and programs delivered. Leverage at the half year was 1.6x, well within the covenant limit. Net debt will increase from here to the year-end. However, our RCF drawings are slightly higher now than at the half year, and we'll need to draw down further in the next few weeks given the quieter Q3 and the true-up payable to ITV under our contracts.

From a modeling perspective, I'd suggest you assume GBP 45 million to GBP 50 million for net debt at the end of the year, including production financing. Following our trading update in late July, we've taken a number of measures to provide the business with additional cash management flexibility and incremental headroom. These measures included securing a slightly larger RCF and some covenant amendments during 2026. Now I'll stress here that our central forecast is not predicated on us using these amendments. Rather, this was a proactive measure given the market uncertainty and lack of visibility and allows us to focus on trading performance and delivery of the strategy.

On pensions, we remain on track to achieve full funding on a technical provisions basis by October 2030. The accounting deficit has reduced over the first half of the year and is lower than it was 12 months ago. Within our recovery plan, we have agreed contribution payment flexibility with the trustees that allows us to defer payments during 2026 into 2027. So of the GBP 10 million that would have been payable in 2026, we can pay up to GBP 9 million in 2027, along with the contributions for that year. This gives significant flexibility during 2026. It's also worth noting that we'll be in discussion with the trustees throughout 2027 to agree the next triennial valuation, which is due at the end of December '26.

The last thing I wanted to talk about was the group's cost base and how we've developed our savings plan. This slide looks to break down the cost base into its key component parts and reflects the current position. It excludes direct program production costs, which are met by the commissioner and vary directly with revenue. 1/3 of the cost base relates to contractual payments to ITV under the long-standing arrangements in place. About 1/4 of these payments are inflation linked, but 3/4 vary with revenue. The variable element is our contribution to the Channel 3 national program budget, where the amount we pay varies from 1 year to the next in line with national advertising revenues.

So when national advertising revenues go up, our costs go up. And as is relevant in the current climate, when revenue goes down, our costs go down. The largest single element of our cost base is our people, who comprise around 40% of the total. Taken together with payments to ITV, these 2 categories comprise 75% of our cost base with the remaining 25% across a number of different areas, each no bigger than 5% of the total. These include direct costs, noncash items, PSB and license obligations, property costs, et cetera.

The direct costs are predominantly in the digital part of the business and our revenue share payments for player content and ad serving and related costs that vary with activity and volume of viewing. It's also worth noting that in this analysis, the costs of the news team are included under people with the other PSB costs being transmission, Ofcom, et cetera, that's shown separately on the right-hand side. Of the people costs, around 35% are direct sales teams, which is roughly 15% of the total cost base. This means our addressable cost base is around 40% of the total. This assumes that costs to ITV and direct sales teams are not addressable nor are those other costs that are incurred in direct proportion to revenue or activity.

We've also assumed that noncash costs, predominantly depreciation are addressed through review of the CapEx plans for the business. Our approach to building our plan has been tailored to each individual part of the business and has sought to answer the questions, what's the primary role of the team? Are there technology advancements that would enable us to be more efficient? Do we expect activity levels to go up or down in the future? Do we need to do this activity at all? We've then made decisions based on the answer to these questions and have identified full year savings of GBP 3 million so far. These are in addition to the existing cost saving target previously published and have been enabled in part by decisions taken earlier in the year to merge broadcast and digital.

The full amount is within our control to deliver and actions are being taken immediately to maximize the P&L and cash benefit whilst treating our people properly through what will be an unsettling time. We recognize that our news provision is a key part of being a PSB, but it's also a significant cost to the business. We've identified changes we'd like to make, but these require changes to our licenses and so need Ofcom's agreement. We're in discussion with Ofcom and any savings we can realize here will be incremental to the numbers on the slide. The cost of change associated with the changes identified so far is estimated at around GBP 1 million.

I'll now hand back over to Rufus, and he'll take you through the strategy update and outlook.

Thank you very much, Lindsay. So as you've heard, the short-term environment is difficult. And at times like this, it can be understandably hard to focus on the longer term. We've moved really quickly to respond to market conditions. But whilst ensuring that STV is resilient today, we also need to ensure that we are well set for when market conditions improve. That means staying committed to our strategy and adapting where necessary. And since our strategic update in May, there has been good progress.

In May, we said that an important part of running the Studios division is active portfolio management. And you will have seen today that we have made the decision to stop development activity in STV Studios Entertainment and make no further investment in Mighty productions. This is a response both to current market conditions, but also our long-term view of where content demand lies. Premium drama remains very much in demand, and we are delighted that Army of Shadows another high-profile commission for 2 cities, the makers of Blue Lights and Amadeus has been secured, another returnable piece of IP with international appeal.

We've made good progress bringing our broadcast and digital divisions together. This avoids duplication. It also simplifies and focuses our overall viewer and advertiser proposition. Linear viewing declines have been partially offset by the highest ever STV player viewing in H1, which has continued also throughout the summer months. In a few moments, I'll also talk to you about the launch progress on STV Radio. And we are in discussions with Ofcom about changes to our licenses to support news cost savings. This will enable us also to accelerate our digital ambitions to future-proof news and bring in younger viewers.

This is our simplified structure and strategic focus, which we showed you in May. And this organizational design helps us navigate our current environment, but also help unlock future growth. We are creating an STV that will continue to be Scotland's leading platform for audiences and advertisers through our Audience division, and we will be a globally recognized content powerhouse through STV Studios. This gives us huge regional strength in Scotland and international ambition. And our strategy is built around 2 pillars: building and monetizing the audience, delivering a high-reach video and audio proposition across the STV channel, STV Player and our soon-to-be launched STV Radio.

We're also expanding our advertising proposition with advanced formats and new targeting capabilities, remaining relevant to both mass market advertisers and those looking for enhanced targeting. And we are driving content growth through STV Studios, delivering high-quality IP with strong returnable potential, and we are making sure we have the best portfolio for now and for the future. This structure is right both for current market conditions, but it will also deliver long-term value creation. We are responding to challenges, but we are also building a business that can thrive when conditions improve.

So let's take a look at the Audience division first. So we know there is structural viewing decline, but I will carry on, but STV continues to have scale and reach. In H1, STV reached more than 3/4 of all Scots every month, over half of Scots every week and almost 1/3 of Scots every single day. And on the right-hand side, you can see that we continue to be the destination for scaled audiences. 96% of the top 500 audiences in H1 were on STV.

And as we mentioned earlier, STV Player had its biggest ever first half even without the men's football euros from last year, with an increase of 8% in viewing. And if you look at third-party content, we had even stronger growth at 16% through smart content acquisitions from the team across a range of British and U.S. titles. And STV Player continues to be an effective way of capturing younger viewers with over 54% of drama consumption from under 45s now coming through the service.

Now you saw this slide in May, but I'm showing it again. It's a clear visual demonstration of how complementary radio is to our existing viewer proposition. Radio listening is strongest in the morning and TV in the evening, but also radio listening remains strong and resilient and is being enhanced rather than disrupted by the digital world, which is offering more ways to listen. And in fact, commercial radio listening is growing across the U.K. and even more in Scotland, and we have a strong marketing platform and the power of the existing STV brand as well.

So the ramp-up to launch has started. There is already significant brand awareness. You can see a snippet of some of the coverage we generated when we announced our plans to move into audio in May. The Ofcom license has been granted. We announced Tunnock's this week as our first confirmed advertiser on the service with a 6-month deal. The presenter lineup is taking shape with breakfast morning and drive time talent confirmed.

And as you can see from this slide, STV's advertiser proposition continues to develop. We are able to offer brands mass audiences, and there'll be none bigger than in the 2026 Men's World Cup next year. We were able to offer regional targeting, but we're also able to offer micro targeting, delivering for new to TV advertisers in a cost-efficient way. And we've been running pilots recently with low-cost AI-generated creative from STV for local clients in Scotland and early results are very encouraging. And we are launching other additional formats. Pause ads have gone live last week on STV Player on the browser and we will launch on all major platforms in time for the return of I'm A Celebrity. These are ads that are served on screen when the video is paused.

And next year, we are planning to launch linear ad replacement, where we can serve different ads to different people within the same 30-second time length to maximize yield and targeting. Even though viewing habits are changing, TV advertising also continues to work and priority #1, as we know, for all marketing departments is effectiveness. TV is the greatest driver of ad-generated profit with a 5.6x return on every pound invested. And TV and radio combined can improve cost effectiveness from brand campaigns by over 20%.

Now let's turn to news. News is a vital part of the STV brand, and STV News remains the most watched program at 6:00 p.m. beating the BBC. We want to protect STV News for the future, and that means making sure that it has a big digital as well as broadcast impact, but importantly, that it is also on a sustainable cost footing. To do this, we are in discussions with Ofcom about a simplification of our news license requirements. We are consulting with them about enabling both licenses to co-produce one show for Scotland and remove all regional opt-outs. If we are successful, this will deliver additional savings beyond the GBP 3 million announced.

Now to STV Studios. We have talked about the slowdown in U.K. unscripted PSP commissioning, but we have a highly competitive set of creative labels, and we believe we are outperforming the market. We remain focused on returnable IP and long-term value creation. In scripted, there is a lot going on, and it is on plan. Blue Lights series 3 is returning on Monday, and the BBC are doing a huge campaign to support its return. Amadeus, the story of Mozart, is launching by the end of the year on Sky. Criminal Record 2 has now been filmed and scripts for Series 3 are in paid development. The Witness, our first-ever commission for Netflix has been delivered, and we have already talked about Army of Shadows for Channel 4.

Unscripted is harder at the moment, but year-to-date, we have had 15 returning series and 12 new and potentially returnable series. And returning series are obviously a key metric of success for studios. We also have a really strong customer base and our secondary sales revenue, which is at a very high margin, is on a par with the first half of 2024.

We are confident that the long-term fundamentals for our Studios business are strong. We have extremely strong relationships with broadcasters, streamers and international co-producers. The U.K. is the #1 place in the world in creating big IP formats and global demand for premium drama will remain strong. We are a leading nations and regions producer and PSBs need to actively commission out of London, and there is no better place to do that than Scotland. We have strong returns from our recent investments with momentum in labels like Hello Halo based here in Glasgow, Tuesday's Child and Crackit. And when market demand returns, we can scale up quickly through freelance talent without increasing our permanent headcount. So if that is the long term, we obviously also need to focus on the now.

As mentioned, as a response to the unscripted market conditions, we've made the decision to close STV Studios Entertainment for new development, and there will be no further investment in quiz label Mighty Productions. We are laser-focused on rightsizing our development spend. We have very clear priorities over the next 6 months. In terms of the Audience division, we want to continue the strong viewing momentum we've had year-to-date on STV Player. We are expanding our advertising proposition through some of the products I talked about earlier like pause ads and the greater targeting capabilities to unlock incremental revenue.

We're going to launch STV Radio, and we're going to start the changes to our news output, delivering a more cost-effective digitally focused service for our viewers. We will continue to actively manage our studios portfolio of labels, rightsizing our development spend to reflect current market conditions, focusing on returnable IP with strong margin potential. And we will be leveraging our nations and region status to remain a preferred partner for PSBs. And all of this will be underpinned by our new cost savings plan that we announced today to ensure that STV emerges stronger and more profitable when market conditions improve.

And before we turn to Q&A, I wanted to quickly turn back to the bigger picture. Despite the challenges we faced, we have a short-term and a long-term plan. In the Audience division, we are driving digital revenue growth, expanding into audio and continuing to deliver mass commercial audiences. At the same time, we are managing costs strategically to ensure long-term sustainability and growth. In Studios, we are led by world-class creative talent with brilliant relationships with customers. Our focus, as I've said already, is developing returnable IP with international appeal. We are maintaining a strong development slate with strong cost discipline as well. We are not just reacting to market conditions. This is a business that is adapting, evolving and positioning itself for long-term success...