STV Group plc (STVG) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to the STV Group plc investor presentation. [Operator Instructions] The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so and needs to be available via your Investor Meet Company dashboard. Before we begin, I would like to submit the following poll. And I would now like to hand you over to CEO, Simon Pitts. Good afternoon, sir.

Good afternoon, and hello, everyone. It's a real pleasure to be here. Over the next few minutes, I'm going to give you some perspectives on the future of the TV market, and in particular, why my business STV offers both profit and dividend growth potential. But first of all, let me just briefly introduce STV. We're not necessarily a household name outside Scotland. We're not quite a global powerhouse yet, but we're on our way. The simplest way to describe us is as the ITV of Scotland, but with Go Faster strikes, we like to think. So if you switch button 3 on your TV set in Scotland, you get STV, not ITV, lots of familiar programming, the big soaps, Coronation Street and Emmerdale, the 9:00 dramas, Saturday night entertainment shows, but also with comprehensive Scottish news, current affairs and regional programming representing all parts of the country. We are very much Scotland's commercial public service broadcaster. We also operate STV Player, a streaming service, which has over 3/4 of the Scottish population signed up as a registered user and has recently launched right across the U.K. for the first time. And we run Scotland's largest television production company, STV Studios, which has now grown to over 20 production companies covering the full range of genres, making shows for an increasing number of broadcasters and streamers from our bases across the country. And the first half of 2023 has seen us markedly accelerate the diversification of STV and what continues to be, obviously, a tough economic climate for all businesses. We delivered excellent total revenue growth of over 20%, while seeing unexpected group profit impact of 33% due to weak linear advertising and rising costs, which are starting to ease somewhat as we move further into the second half of this year. As an illustration of how far the business has progressed in the last 5 years, strong revenue growth in each of our key areas of studios and digital comfortably offset the linear advertising revenue decline in the first half, with Studios revenue almost quadrupling, even before the positive effect of the recent Greenbird acquisition is felt in the second half of the year and digital revenue continuing to grow on the back of our new streaming partnership with ITV. On screen, our audience position remains very healthy. We had our biggest half year ever on STD player with streams up 25%, new registrations up by 2/3, and we retained our crown as Scotland's most popular peaktime TV channel for the sixth first half in a row, growing our lead over BBC1. Total advertising revenues were down 14% from January to June, in line with our previous guidance, but Q3 is more encouraging. We expect the quarter to be up around 3% to 5%, driven by big events on STV like the Women's Football World Cup earlier in the summer and the Men's Rugby World Cup, which as many of you all know, is, as we speak. We're clearly still living in uncertain economic times. Everyone knows that. It's hard to call the outlook for linear advertising beyond Q3 as it's so dependent on macroeconomic sentiment. However, I can say 2 things very clearly. Firstly, that we're confident the market will bounce back decisively as the economy bounces back because we've seen this sort of cyclical dip many times before, and only TV has the collective reach and mass scale that advertisers require to build their brands. And secondly, that when the linear ad market does recover, STV is very well placed to benefit. And as a guide, every 1% upturn in total advertising for the year roughly translates into GBP 0.5 million of incremental profit for STV which is clearly very material for us. That said, STV obviously needs to be a business that can thrive in all economic climates. It's why we embarked on a proactive diversification strategy 5 years ago, and we are particularly encouraged that we now expect at least 60% of our 2023 operating profit to come from outside of traditional broadcasting, comfortably ahead of our target and evidence that we're rapidly becoming a more resilient, more balanced media business focused on growth. And it's against that backdrop that the board recommended an interim dividend of 3.9p per share for the first half in line with the same period in 2022. And let me just remind you of our diversification strategy before we go any further. And our growth targets that accompany that, as many of you know, we have a clear, well-understood plan that has delivered strong financial results in recent years. That plan has 3 key pillars. Firstly, building a world-class studios business, producing returning TV series for the biggest networks and global streamers, secondly, driving our digital performance by becoming a leader in streaming through STV Player in Scotland and beyond and thirdly, maximizing the unrivaled strength of our broadcast business by maintaining our clear viewing and advertising leadership in our home markets. 2.5 years ago, we announced ambitious targets to quadruple our Studios revenue, double the size of our digital business by the end of 2023. And I'm delighted to say that we're on track to exceed those targets. The linear advertising downturn means we're unlikely to hit the GBP 20 million broadcast revenue target in Scotland. But overall, we will comfortably exceed our key diversification metric of delivering at least 50% of our operating profit from new growth areas by the end of the year. In fact, we think we'll reach over 60% way ahead of plan and an illustration of how far we've come in the last 5 years. And for context, in 2018, our nonbroadcast earnings were only 18% of the total. So we were 80% dependent on linear advertising for our group profits. This next slide tells that 5-year diversification story a little bit more visually. The pie chart on the left shows that in 2018, nearly 80% of group revenue came from traditional broadcasting with a small minority from our fledgling studios and digital businesses fast forward to 2023. And not only do we expect our group revenues to be 50% higher than in 2018 overall, they're also much more balanced with less than 50% coming from traditional television and the broadcast and Studios businesses now similar in scale with each of our 3 divisions contributing materially, not just to revenues but also to group operating profit. And moving on to the divisional updates. I'll start with our studios business, which is growing at an increasingly rapid rate. We were already on track to double the size of STV studios this year and the recent Greenbird acquisition means we'll take an even bigger strive forward in terms of scale and profitability and creative firepower. We really couldn't be more excited about the newly enlarged business. The team have really hit the ground running. And just to reiterate the financial and strategic rationale for the deal, it is materially earnings enhancing and EPS accretive for our business in 2023. So immediately, crucially also margin enhancing for STV Studios. At a stroke, our in-house creative labels grow from 9 to 24, our returning series more than triple, and our STV Studio senior management team strengthened significantly through the addition of highly respected creative and commercial leaders from Greenbird. That added scale makes us one of the country's leading production groups, takes us closer to our goal of becoming the U.K.'s most successful nations and regions producer in an era of leveling up where the center of gravity in U.K. TV production continues to shift decisively away from London and the South East. And with scale also comes much greater resilience as a production business. We're hearing a lot about the commissioning slowdown in the market at the moment, which is linked to wider economic uncertainty, very much a cyclical thing, in my view. But the truth is that a group of 24 production companies with 39 returning series as we've become now is far better place to navigate a more challenging market than a smaller player might be. So in short, the Greenbird's acquisition is transformative for us financially and creatively, it's right on strategy. It will accelerate our revenue and earnings diversification away from linear advertising and towards the growth areas of global content and IP ownership. The enlarged STV Studios will be a GBP 70 million plus revenue business in 2023, made up of the 9 majority-owned labels on screen there that are now part of the group. We're one of the very few production companies in the U.K. to make both scripted and unscripted shows with an even balance across the two meaning that our addressable market is all of the U.K. TV production spend, not just a subset of it. And we now have an incredible portfolio of returning series, as I say, which will make up nearly half of our revenues this year and gives us a strong head start each year in terms of our financial performance. And the remaining creative labels are 15 minority investments, providing significant strategic option value for our Studios group over the next few years. The larger minorities on the left there range from 25% to 40% stake. It's these companies that are most likely to move into meaningful profitability over the short to medium term. In some cases, there are prescribed routes for STV to consolidate. In others, there are strong relationships and service agreements in place. But what this does in simple terms is give STV an exciting derisked M&A strategy that should allow our Studios business to scale even more rapidly without the need for additional large Greenfield acquisitions. We will, in effect, be able to evaluate our M&A targets from close quarters before consolidating those businesses in success. And this next slide shows some of the creative firepower joining the group with the Greenbird deal even in the short time Since the July announcement, there have been 4 further commissions for Rumpus Media for Channel 4, BBC and Amazon Prime and 3 new commissions for Tuesday's Child and their subsidiary Interstellar. One of these shows is a big new reality format for ITV in 2024 called the Fortune Hotel, which will be filmed in the Caribbean and is described as a cross between white Lotus and the traitors, which sounds good to me, and hopefully to some of you too. We're also very focused on the international growth potential of our expanded Studios division. Lego Masters is a show has already been sold to over 20 territories including China, including South America and right across Europe. And later this month, Series 4 of its U.S. version will play on the FOX network in Prime Time. Our Quiz format Bridge of Lies is on a similar trajectory, now sold to 15 territories worldwide, including a new Spanish version on the slide there, back to play on the national Spanish broadcast at TVE. And we're now developing a joined up international strategy across the enlarged group to generate maximum value from our shows outside the U.K., including potentially having the ability to produce or coproduce shows in key territories like the U.S. and Europe, which allows you to keep more of the margin associated with that share. That international strategy is just one of the work streams that we're prioritizing as part of a Greenbird integration that's already well underway, as you'd expect. The team is very focused on key back-office tasks like the operational integration of the businesses, realizing cost synergies, et cetera. But equally, there are important creative and commercial synergies to go for, whether that's reviewing our U.K. growth strategy across the various labels or developing a commercial IP strategy to maximize the value of our content with global distributors. We expect to make significant progress integrating the businesses by the end of this year. And as we guided in July, we will deliver revenue and cost synergies of at least GBP 750,000 per annum from 2024. To finish this section, a reminder of the ambitious vision for studios and the key strategic objectives that underpin it, growing returning series, expanding customers in the U.K. and internationally and a combination of organic and M&A-driven growth through our unique portfolio of majority and minority investments. And in short, we see no ceiling to the potential growth of STV Studios over the coming years as we aim to continue to win market share, both in the U.K. and internationally. So turning now to digital and the first half of 2023 has once again seen strong growth for our streaming service STV Player against all the key metrics. Our vision here is to be Scotland's leading AVOD streaming service as well as a U.K.-wide free streaming destination -- the simple goal is more people watching more content for longer because we know that, that translates into more financial success. New registrations were up 65% in the first half of the year as we added over 400,000 new users. Active registered users were up 300,000 or 38% and, VIP users, those who watch the most STV content were up a further 24% and that helped us overall drive a 25% increase in both streams and total online consumption, all of which translated into a strong financial performance in the digital division. And you can see that we're on track to hit the stretching 3-year targets we set ourselves for the end of 2023 across users, across streams and revenues. This slide shows the early positive commercial impact of the new ITV streaming partnership, which we agreed late last year, which guarantees STV exclusive access to new content on favorable terms. We said that the rationale of our outsourcing digital advertising sales was to benefit from ITV's scale and pricing power as U.K. market leader as well as their significant investment in new targeted addressable advertising, and we're already seeing these benefits come through very clearly in our numbers. The chart on the left there shows that our digital brand camp is already up by 50% so far this year, broadening our revenue base, reducing repetition for our audience. Our average sales price is up even further in the first half by 55%, driving strong VOD revenue growth, but also allowing us to reduce the overall amount of advertising we show to viewers, improving their experience in turn and driving longer-term loyalty amongst audiences. STV's price increase has also been underpinned by our launch on Planet V, the U.K.'s second largest programmatic advertising platform after Google which has enabled fully addressable advertising at scale on STV Player for the first time with over 90% of our digital advertising now targeted using our own first-party registered user data. And alongside improving the content and the commercial offer, continuous improvement of the STV Player product, of course, is really important to grow our streaming service and to grow our audiences. Launching your own app onto a digital platform rather than just supplying your content is a great way of securing more control, more data, more prominence because you are in charge of the user experience, not the platform. The launch of our app into over 8 million Sky Q homes earlier this year was a big step forward strategically in that regard. And you can see how front and center our brand is now alongside the likes of Netflix and BTI player on the Sky homepage there. And the great news going forward is that this public service prominence is set to be enshrined in primary legislation on all digital platforms through the U.K. government's new media bill, guaranteeing that STV contact will be easily accessible everywhere for the long term. And that prominence helps us ensure that all that great content gets to the biggest possible audiences. And we've got a really strong lineup for the second half of the year. Dramas like the Epic Winter King, new entertainment like My Mom, Your Dad with Davina McCall, which I hope a few of you got to watch less cringy than the title suggests. The Women's World Cup, as I said, was a very big success earlier in the summer. England's quarter final win over Colombia was the biggest match of the tournament for us even in Scotland with a 52% viewing share. And of course, the Men's Rugby World Cup started last month, exclusively on STV. We've seen fantastic audience so far and some huge gains coming up this weekend on STV. Turning finally then to our broadcast business, our third division, has been another strong audience performance in the first half of the year. There have been a few shrill headlines, so to speak, in the recent weeks about broadcast viewing declining. But that is only against the artificial highs of COVID viewing back in 2020 and 2021. And the facts tell quite a different story about the enduring popularity and resilience of the terrestrial broadcasters, including our channel. So on the left there, STV's top 3 dramas of 2023 so far, plotted against the top 3 from our 5 closest commercial competitors in Scotland. So Channel 4, Channel 5, Netflix, Disney+, Amazon Prime all compared with one another. You can see that STV's top 3 dramas, including favorites like Unforgotten and Vera are twice the size as all the others. The pie chart on the right then shows the split of the top 500 program episodes in Scotland by service across all of the services, the brand-new global players as well as the terrestrial broadcasters. Those terrestrial broadcasters were still responsible for 98% of the most popular shows in the first half of this year. STV had 76% of them, 19% for BBC1, Netflix's share of those shows 0%, NADA. So look at it at a slightly different way. I'm not saying no one watches Netflix, of course, they do. But by comparison to the size of the audiences on our channels, they are still small. The average scot spent 5x longer with broadcaster content on a TV set in the first half of 2023 than they did with content from Netflix and the other streamers put together. And this chart shows that STV was the most watched commercial channel in Scotland for 180 out of the 181 days in the first half of this year, only picked on the tenth of June by the Man City Champions League trial against Inter Milan. And the boxes on the right underscore that STV's viewing position is strengthening further our lead over BBC1 and ITV has actually widened in the first half of this year. Turning then to the outlook. There is still clearly plenty of uncertainty, but we can report an improving picture in the round. In revenue terms, we're expecting to continue the very positive momentum of the first half of the year and deliver a full year revenue performance, at least 25% ahead of where we were last year for the full year. Total advertising revenue is expected to be up around 3% to 5% in Q3, although down overall for the full year. We remain on track to exceed the 3-year revenue targets. We set ourselves for Digital and Studios of GBP 20 million and GBP 40 million, respectively. As I said, in the case of our Studios division, our full year revenues are actually forecast to triple year-on-year to over GBP 70 million. In terms of operating profit, the impact of the linear advertising decline and cost inflation will mean full year group adjusted operating profit will decline versus last year as we expected. But we're expecting a better half 2 performance on the back of an improving advertising market and gains in studios boosted significantly by the acquisition of Greenbird, which will add material revenue and operating profit to the group in the second half. And on that front, we're reconfirming our previous guidance from July of over GBP 6 million of adjusted operating profit for the enlarged STV Studios business this year. Overall, as I say, we're expecting to deliver at least 60% of STV's earnings from outside traditional linear broadcasting in 2023, comfortably ahead of our 50% target that we set ourselves 2 or 3 years ago. And that means, of course, that new targets are required for the next phase of STV's diversification, which will be confirmed in due course. So that's it in terms of me presenting. I'll leave you with a summary and our key message that the STV of 2023 is now a very different business to the one we took on 5 years ago. It's more balanced. It's more resilient, it's more growth and delivery focus all of which has created a strong platform for the next phase of our diversification. So I'll pause there and open up now for questions.

[Operator Instructions] I would like to remind you that a recording of this presentation along with the copy of the slides and the published Q&A can be accessed via your investor dashboard. Simon, as you can see there in the Q&A tab, we have received a number of questions throughout your presentation this afternoon. And thank you to all of those on the call for taking the time to submit their questions. But Simon, if I may just hand back to you just to make your way through the questions and just read out and give your responses where it's appropriate to do so, and then I'll pick up from you at the end.

Sure. We'll do. Look, thank you, and thanks for your attention and for the questions you already submitted. There are a number of them here to go through. First off, how has the Studios division been affected in any way by the Hollywood strikes? Yes, been in the news, obviously, over the last few months, good news that the writer's strike appears to have been resolved. Hopefully, the actor's strike will also be resolved soon. There hasn't been a direct impact on STV Studios. We don't have U.S. shows that have been either paused or canceled or have been difficult to make because of writer talent, not working or actor talent not working. We've made shows and continue to make shows for U.S. players, for example, a new drama show called Criminal Record that we're making for Apple TV Plus and that will be launched in the new year to 100 countries worldwide, but it doesn't involve U.S. actors. It hasn't had a U.S. writer, so we haven't been impacted. Overall, there's been a bit of an impact across the industry in the U.K. because there are some U.S. shows that are made here, and that has impacted on the work available for freelancers, which you may well have read about, but it hasn't impacted materially on STV. Okay. Next question. You clearly have a winning strategy as evidenced by the strong growth in Studios and Digital, but the share price doesn't recognize the progress you're making? What more can you do to elevate investor awareness of the positive STV story, please? Well, look, thanks for the question. Yes, it's not -- it's not lost on me that we are not valued in the way that we would like to be and that the share price has been going in the wrong direction in the last few months. We don't control the share price. Obviously, what we control is the strategy and the delivery of the strategy and where I think we really have delivered is on the promises we have made around growing this business and diversifying this business and in so doing, making it much more resilient both now and in the future to the volatility of the ad market. We believe that TV advertising is strong, is robust, will come back strongly as the economy comes back, but we can't just rely on that. We also have to be a business that can proactively diversify its earnings profile. And I think what you've seen over the last 5 years, as we set successive targets for our diversification and our growth in Digital and Studios is that we have not just delivered those, but exceeded those. What we can do is keep banging the drum and not lose faith in markets, but keep articulating how we are changing as a business. We think that 2023 is quite an important year for us because we will hit the milestone of more than 50% of our earnings, our operating profit coming from outside traditional television for the first time in our history, up from around 15%, 5 years ago, when we set out the plan. So we think that means that the business is more resilient. We think that means that we are set up for growth in the future. And we also think we are replacing more volatile earnings with higher quality earnings in the global business of owning IP and producing content for international markets as well as U.K. markets. But of course, that requires the market to see us differently and to rate us differently. You can assume that we speak to a lot of both shareholders and non holders on our road shows and around the year. We are trying to do more of this sort of event and speaking to retail investors to get our story across. And we have to keep delivering against our strategy to grow and diversify our business. So that's what we're doing. I hope you -- I think that we're being very proactive about doing it. Of course, we can't control the macro picture. We can't control how investors see the small-cap market sometimes, the outflow of funds we've seen from institutions in the small cap market, but we can see conditions in which that small cap market does recover, and we can crucially, for us, see conditions in which the ad market comes back strongly, and we keep delivering on our plan. So look, no silver bullets, there never are when it comes to share prices, but we're focusing on delivering the strategy, which we think is the right one for the company. Any further plans around diversification? Is the next question. Yes, I think it's a continuous process of diversifying this business. It's not that we think that the core business, our broadcast business isn't resilient. We think it is. And although we've acknowledged that linear broadcasting and linear advertising is in slow run long-term decline, of course, it is when you look at viewing habits, we still think we have an incredibly strong position, a profitable broadcast business a highly cash-generative broadcast business and a broadcast business that relative to its nearest competitors is doing incredibly well. And that in part, determines the desirability of advertisers to -- advertise with us. How can they hit the biggest audiences relative to the next best options out there, and we are growing versus those competitors. But we also have to recognize that we have to future-proof our business against more volatile advertising trends. That's why we are embracing streaming in the way that we are. And you've seen our digital advertising revenues have been up in successive years over the last 5 years are up another 14% in the first half of this year. And we have high hopes for the rest of the year and beyond. And of course, our focus in Studios where after, I guess, a decade of STV underperforming in production and not being profitable, we've been profitable for the last 2 years, have quadrupled the size of our business in the last 3 years and are on target for a really strong performance of north of GBP 70 million of turnover and GBP 6 million plus of profit. And that journey must continue. We think both in Studios and in Streaming, we have new targets that we will articulate in the coming weeks and months as our current diversification plan takes us until the end of 2023. But you can assume that we will continue to focus on the core growth areas of streaming, both in the U.K. and internationally and Studios, both in the U.K. and internationally. We see no reason why a Scotland-based production company can't be making world-class shows in Drama and in Entertainment and in factual for all comers. And this market -- global market is huge, and we have at sub GBP 100 million of turnover, only a tiny percentage of it so far. But we've been growing market share and scale quickly, and we expect to continue to do so. As a follow-up, what percentage of revenue would you expect to come from outside broadcasting moving forward? Well, I've said that in 2023, it's about -- it's sub 50% of our revenue in broadcasting. It will be sub 50% of our profit for the first time ever. I don't think we should necessarily in this next phase of a diversification set a target because, of course, you can get to that target in 2 ways, by your broadcast business declining or by the rest of your business is growing and growing strongly. So I'm not sure a proportion of -- setting a proportion of revenue is the right target for us. But you should assume that we are ambitious about the growth of both our streaming business through STV Player and our Studios business and that we'll be setting ambitious targets accordingly. There, we mentioned the share price performance, we are long suffering shareholders, small, large directors alike. What does the Board say about this? Do you see light at the end of the tunnel? There are no -- and there have been 1 or 2 other questions along those lines, and I'll try to summarize as I did a couple of questions ago. There are never any silver bullets here. It's important to be honest about that. I think what we can do as companies and STV is not alone here in the small cap space is deliver on our growth strategies and try to make our businesses better businesses, more profitable businesses, businesses that are set up to grow in the future, businesses that are more diversified and more able to withstand the economic pressures that we are seeing. I think that's what we're doing. I think that's what we're doing very convincingly actually and have come a long way in the last 5 years. You're right that, that has not currently shown through in the share price. I don't think we're alone as a business there in being a lightly traded small cap stock that has been buffeted in some pretty fierce headwinds in the last couple of years. It's been a difficult period. But in the last 5 years, we've grown our operating profit by more than 1/3 in possibly some of the toughest economic markets we've ever faced. We've managed to diversify away from our core source of revenue, which -- on which we were 80% dependent and which will be less than 40% dependent at the turn of this year. So we've managed to reinvent our business creatively and commercially to be able to deliver those strong results despite tough prevailing market conditions. And we have to keep the faith as a management team and as a Board, that we'll be rewarded for that when times normalize and when the economy and therefore, the ad market comes back more strongly. That's certainly our view. We wouldn't rule out anything in order to drive the performance of our business. We consider lots of options on a regular basis with our Board, but our primary focus has got to be on growing our business and delivering on our strategy. And I'd say our shareholders having just come from a recent road show are 100% on board with that. Share buybacks. Look, that's another -- and I agree, our shares are ridiculously undervalued says one of our questions, and I agree with that. We don't rule out anything. As I said, the Board discusses how we allocate our capital on a very regular basis, as you would expect. And we have various calls on our capital from paying dividends to managing our pension contributions to investing for growth. We think we've managed that balancing act reasonably well over the last few years and continue to do so. We wouldn't rule out buying back shares at some -- in the current climate, but we have to balance that against the other calls that are on cash. You can assume it's an ongoing discussion in the Board. Will cash flow conversion be structurally lower going forward due to the inclusion of the Greenberg businesses with minority shareholdings or Cash will be trapped in these entities as opposed to being swept to the parent because they aren't wholly owned subsidiaries? If so, how are you approaching things like debt covenants going forward, please? We -- there is cash in the Greenbird business, including in the topcoat is a cash-generative business. On completion, there was GBP 6 million of cash. So overall, it improved our covenants. And that is, I think, increasingly how we should consider those covenants on a net cash basis. There isn't a lot of [indiscernible] trapped cash in those subsidiaries. There's an ongoing process to dividend out cash to shareholders of those businesses, including, of course, STV now as the parent company. But we'll be proactive about that. And indeed, that is happening as we speak in certain of the subsidiaries. Further, there's been a further question about share buybacks, which I think I've answered or tried to answer at least that we certainly wouldn't rule that out alongside other capital allocation strategies. But again, it's a moment where we need to weigh up, let's put our money and make sure we strike the right balance between rewarding shareholders and investing for the future and giving our pension scheme on track. But look, it's certainly in the mix. And on the defined benefit scheme, there's a question around the current situation with the DB scheme and any plans to offload. Look, our solution for that is the current deficit recovery plan. So that's a reasonably it was a medium-term solution now because that plan anticipates full funding by 2030, which is not so far away these days. The deficit is obviously reduced in the first half of this year to GBP 55 million as a result of the higher discount rate driving down the liabilities. We have another triennial valuation is due at the end of this calendar year, a new funding plan expected to be agreed with the trustees during 2024. And we will always consider whether there are alternative strategies to try to reduce the liabilities and burden here. We don't think we are quite at the stage of either a buy-in or buyout, but we continue to monitor that very closely. And our biggest objective must be to continue to grow this business as the best way of underscoring the financial covenant on the pension scheme, but also ensuring that the pension doesn't look proportionately as big as it does today if we continue to grow that business.

Simon, if I may just jump back and there, thank you very much indeed for addressing all of those questions that came in from investors this afternoon. And of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended, I just view to review to then add any additional responses, of course, where it's appropriate to do so, and we'll publish all these responses out on the Investor Meet Company platform. But Simon, perhaps before really just looking to redirect those on the call to provide you their feedback, which I know is particularly important to yourself and the company. If I could please just ask you for a few closing comments. Just to wrap up with, that would be great.

Well, you can see in amongst the macro picture and uncertainty around the U.K. economy, which is hard to get away from for any stock at these days. We've delivered excellent revenue growth. We've shown in the first half of this year that the diversification is working despite weak first half advertising. The key strategic areas that we've promised we're growing Digital and Studios continue to flourish. Our Greenbird acquisition is transformative, turns Studios into a major U.K. production player. The second half performance we anticipate to be more positive on the back of Studios gains and we hope, improving advertising outlook. 60% of our total earnings will come from outside traditional broadcasting in 2023. We are a different company to the one we were 5 years ago. We think that gives us a really strong foundation for the next phase of our diversification and growth. And look, thank you very much for your attention, for your engagement and questions and look forward to speaking to you again.

Simon, that's great. Thank you once again for updating investors this afternoon. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order of the management team can better understand your views and expectations. This may take a few moments to complete, but I'm sure it will be greatly valued by the company. On behalf of management team with STV Group plc, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all.