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Scottish media firm STV Group has downgraded its sales and profit outlook as “deteriorating” economic conditions squeeze advertising revenues and push back TV projects.

Shares in the London-listed business plunged by about a quarter on Monday morning following the update.

STV said it was now expecting full-year revenue and adjusted operating profit to be “materially below” a consensus of analysts.

Revenues are predicted to range between £165 million and £180 million for 2025.

The company said it was now targeting £2.5 million worth of cost savings this year – higher than the £1.7 million outlined in March – having launched a significant savings programme last year, including across its broadcast operations.

STV blamed worsening conditions in the commissioning and advertising markets in recent months for the profit and sales downgrade.

Advertising revenues for the period between July and September is forecast to decline by 8%, lower than previously expected, driven by a sharp 20% drop in July, it told investors.

The year-on-year decline is set to be impacted by particularly strong sales this time last year, due to the men’s Euro football tournament being broadcast on TV.

It follows a 10% fall in advertising revenues over the first half of 2025.

A number of businesses, including WPP and S4 Capital, have flagged a worsening advertising market as more challenging economic conditions prompt clients to reign in marketing spending.

Furthermore, STV warned the uncertainty was causing significant deterioration in the commissioning market.

It said projects within its unscripted labels were being impacted with some in advanced development not getting the green light, and others being delayed into 2026.

Nevertheless, it highlighted strong progress within its scripted labels with current projects including for Netflix, Apple, Sky and the BBC.

Rufus Radcliffe, STV’s chief executive, said: “The deteriorating macroeconomic backdrop continues to lower business confidence impacting both markets in which we operate.

“STV Studios’ delivery schedule for the remainder of 2025 has been impacted by the UK commissioning market, which has further weakened at the end of H1 (the first half of 2025) and into the second half of the year.”

But he said production had finished on “key titles with international appeal, including high-end drama Amadeus for Sky and a third series of Blue Lights for BBC One”.

“We are proactively responding to market conditions through a combination of investing in targeted future growth initiatives aligned with our long-term strategy and identifying efficiency and cost saving opportunities across the business,” Mr Radcliffe added.