INVESTOR PROPOSITION

STV Player has seen rapid growth over the last three years, driven by significant improvements in the user interface and reliability of our streaming service; expansion on all major platforms across the UK; and a growing programme offering which combines first run original network and regional content and a huge array of acquired third party international content and rich STV archive. In December 2022, we announced a strategic partnership around content sharing and advertising sales with ITV, that creates incremental digital value for our business and sees ITV’s market leading sales team sell our digital VOD and simulcast advertising from 2023, allowing us to benefit from ITV’s unrivalled scale in the market.

The Studios business is strongly positioned to take advantage of increasing demand for quality content in a UK production market worth more than £3.3bn, as well as growing international opportunities. The division won a record breaking 30 commissions in 2022.

In July 2023, STV Studios announced the acquisition of Greenbird Media bringing a network of 15 independent production companies into the STV Studios family boosting the number of labels in STV Studios from 9 to 24. The acquisition positions STV Studios as one of the largest production groups in the UK, trebling the number of returning series from 12 to almost 40, including international series, strengthening STV’s existing rights catalogue and future creative pipeline.

The £30m STV Growth Fund brings new advertisers to television by making it affordable and accessible, mainly by match funding advertising campaigns. Since launch in 2018, we have allocated over £20m of funding across 1000+ deals.

The Group was in a net debt position of £15m at the end of 2022, underpinned by a £60m revolving credit facility (recently extended to 5 March 2026), providing significant headroom and financial flexibility. We announced a £30m investment programme in March 2021, of which c.75% is aimed at driving the growth in Studios and Digital. The pension deficit is well managed with core deficit recovery contributions constant for the last three triennial valuation cycles (the most recent being at 31 December 2020).

Our business is highly cash generative with good overall operating cash conversion. We believe this cash generation will continue and will enable us to fully execute our investment programme.

We confidently reintroduced a cash dividend in May 2021, mid-pandemic, and recognise the importance of paying a sustainable and progressive dividend. Our approach to setting
dividends is to balance the needs of the business (for reinvestment), with our pension obligations and shareholder returns. In setting the level of dividend proposed, we consider all relevant factors including macroeconomic and geopolitical uncertainty, and the proportion of free cash post pensions that it represents. We are committed to maintaining a balance between shareholder return and investment in our business to continue to deliver the growth strategy, which is in an exciting phase.