STV has been through a period of turmoil and change that sees it enter the second half with a slimmed down payroll and TV structure and a new radio station which has beaten expectations.
While STV Radio’s early performance will draw immediate attention, the underlying business continues to rely heavily on the Studios business.
In March it announced a full-year loss but said it was on track to achieve £8 million in cost savings, largely a result of shutting its dedicated northeast operations, and its Studios revenue remained resilient as it continues to pick up commissions.
Last month it said the radio station, launched in January, was attracting 139,000 weekly listeners, making it one of the top ten most-listened-to commercial radio stations in Scotland. This is above forecast and, importantly, listeners are said to be sticking with the station during the day, spending over 9.3 hours with the station each week.
As an aside, Sky’s £1.6 billion acquisition of ITV’s terrestrial channels and streaming service ITVX has implications for commercial television in Scotland, including the potential for ITV, which retains its own studios business in the Sky deal, to see some merit in bringing the two together. The two companies, after all, are long-standing partners in broadcasting and advertising.
The consensus rating for STV Group is “Buy”, based on insights from three analysts. Two recommend buying the stock, none suggests selling, and one recommends holding, according to STVG share price forecasts.
The STV Group 52-week range spans from 95.6p to 121p, with its current share price sitting at 109p. The average 12-month share price target for STV Group is 140p, with a high estimate of 180p and a low of 105p.
Standard Life
On Monday Standard Life will report its first set of results since Phoenix Group adopted the historic Standard Life name in February.
In April it announced the acquisition of Aegon UK from its Dutch parent and there will be keen interest in how this is progressing.
The £2 billion deal will create the UK’s largest retirement savings and income business with £480bn in assets under administration and 16 million customers.
There are understandable concerns about what it will mean for the two businesses. In an interview with Daily Business in June, CEO Andy Briggs said a decision on the Gyle [location of Aegon UK] and the Standard Life offices in Lothian Road had not been decided. “I imagine that will come within a year of completion of the deal, but I am not concerned about it,” he said.
Associated British Foods (ABF)
After a challenging year investors will be hoping for a sprinkling of good news driven by a boost in late summer clothing sales and the approval of the Hovis acquisition.
Whether Primark’s recent UK price reductions have translated into positive like-for-like sales growth will be a key area of focus, say analysts at AJ Bell.
The demerger of Primark by the end of 2027 represents a monumental shift in strategy for the controlling Weston family.
It is likely to be a key test of market scepticism on whether Primark can command a premium valuation as a standalone entity or, like its wares, whether it will trade at a discount.
Currys
Following stellar full-year results in July and a solid start to the new financial year, analysts are expecting Currys to report sustained trading momentum, boosted by demand for 90-inch televisions and beer pumps.
It is the first opportunity for new CEO Fredrik Tonnesen to put his own stamp on group strategy and communicate how he plans to spend the company’s cash.
ECB interest rate decision
The European Central Bank is expected to hike interest rates by a quarter of a percentage point following a similar move in June amid the highest inflation rate since 2023, driven by higher energy prices.
However, core inflation excluding food and energy prices ticked down to 2.4% while services inflation cooled to 3%, giving the ECB an opportunity to frame the hike as an insurance move against the impact of an energy price shock percolating through the rest of the economy.
That leaves Christine Lagarde the tricky job of ‘threading the needle’ between hawkish action and dovish messaging, a challenge Fed chair Kevin Warsh is also facing in the US.
DIARY
Monday 7 September
- Full-year results from Ashmore
- Half-year results from Standard Life
- Halifax house price index
Tuesday 8 September
- Full-year results from Dunelm
- Half-year results from Computacenter, STV Group
Wednesday 9 September
- Full-year results from Frontier Developments
Thursday 10 September
- Full-year results from Genus
- Trading updates from ABF, Currys, Halfords and Ryanair
- ECB interest rate decision
Friday 11 September
- UK GDP, trade balance and industrial production
- In the US, quarterly results from Kroger
- US consumer prices
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