STV Group (LSE:STVG) — Full Year Results

0:01 Good afternoon, ladies and gentlemen, and welcome to the STV Group PLC Full Year Results Investor Presentation. Throughout this recorded investor presentation, you will be in listen only mode. Questions are encouraged and could be submitted at any time via the Q and A tab situated on the right hand corner of your screen. Just please simply type in your question at any time and press send. 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 we'll publish those responses where it's appropriate to do so. Before we begin, we would like to submit the following poll. And if you would give

0:31 that your kind attention, I'm sure the company would be most grateful. And I'd now like to hand over to CEO, Simon Pitts. Good afternoon. Good afternoon, and hello, everyone. It's a real pleasure to be here. Over the next few minutes, I'm gonna give you some perspectives on the TV business as we emerge from the pandemic with confidence and with purpose, and in particular, why my business, STV, offers both profit and dividend growth. But let me, first of all, briefly introduce STV because we're not necessarily a household name outside of Scotland nor indeed a global powerhouse, at least not yet anyway. The simplest way to describe us is as the ITV of Scotland, but with go faster stripes, we like to think. So switch to button three on your TV set in Scotland, then you get STV, not ITV.

1:27 Lots of familiar programming, the big soaps, Coronation Street and Emmerdale, 09:00 dramas, and Saturday night entertainment, but also with comprehensive Scottish news and 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 three quarters of the Scottish population signed up as a registered user and has recently launched right across The UK for the first time. And we run Scotland's largest television production company, STV Studios, which has now grown to nine creative labels covering the full range of genres, making shows for an increasing number of broadcasters and streamers from our bases in Glasgow, in London, and in Belfast.

2:16 But before I go any further, because we're a TV company, why don't I show you what I mean rather than talking about it? So if we could play the tape, that would be great. My biggest concern was history repeating itself. So we did this by the books, honey. I'm not dreamt of doing it any other way, boss.

2:49 He is, by definition, a serial killer. The world is a dangerous place. After months of planning and a year's delay, Kop has arrived in Glasgow. If you're in that red zone, not travel. Tonight, a panel considers how Scotland has changed politically. I think Angus is a real trooper.

3:50 Well, that's good. That's really good. Well, thank you. Discover what you can do to keep Scotland green and clean.

4:14 Fantastic. Hello. I'm Ross Kemp, and this is the Bridge of Life.

5:01 There was an assault. So there you have it. Some fantastic programming to look forward to culminating at the end of the year in a football World Cup played in the desert at Christmas, something we've never seen before, but we're looking forward to it. So 2021 was an outstanding year for us. We achieved the highest revenue and adjusted operating profit on record, accelerating the growth momentum we had pre COVID.

5:54 In doing so, we delivered strong EPS growth, and our excellent cash generation further strengthened our balance sheet and drove a net cash position for the first time ever. Our unrivaled audience position has propelled us to a record advertising year with ad revenues up 24% on 2020 and crucially up 11% on 2019, showing that this was far more than a post COVID bounce back. We continue to deliver strong growth in our high margin digital business. We're not trying to take on Netflix here, but we have distinct streaming proposition rooted in UK content all available for free in an advertising funded video on demand market set to grow very quickly over the coming years.

6:40 And STV Studios is now growing profitably, having trebled its revenues in 2021 and is now on the cusp of delivering exciting growth in what is a fast growing global market for high quality content. I can also report an encouraging start to 2022 as we seek to build on the gains we made last year. Overall, we remain firmly on track to hit our previously announced growth targets out to 2023. And, crucially, there is no change to our cost guidance and the £30,000,000 investment plan sitting behind our targets that we set out last year. And it's against this positive backdrop that the STV board is recommending a full year dividend of 11p per share, 22% up on last year as we maintain our commitment to a progressive dividend alongside, crucially, investing for future growth.

7:34 Turning first to our financial targets. And a year ago, we set out ambitious three year goals across the business to grow our STV controlled broadcast revenues to £20,000,000, to double our digital revenues again to 20,000,000, and to quadruple our production revenue to 40,000,000. Taken together, at least 50% of our operating profit will come from outside traditional linear broadcasting by the end of twenty twenty three, up from 19% when we started, creating a much more diversified business focused on the high growth areas of digital streaming and global production. You can see from this next slide that we are firmly on track to hit those targets, thanks to over £25,000,000 in combined revenue growth across regional, digital, and production in 2021.

8:27 This meant that even in a year when broadcast advertising, the traditional part of our business, grew by a record 22%, we were able to grow our other areas even more quickly and increase our profits from outside linear broadcasting to 36%. There is no such thing as a broadcast market and a digital market anymore. It is one big video market where we all compete for viewers and for advertisers, and we all need to be completely agnostic about how and where our viewers consume our content. And the good news here is that the broadcasters and their video on demand services maintain a very strong position in that combined video market. The chart on the left shows viewing across the day in Scotland for the first seven weeks of this year, and you can see the gulf between all the broadcasters in aggregate, the blue line on the chart, and all the SVODs in aggregate, the orange line, including the likes of Netflix, Amazon, and Disney plus, particularly when it comes to peak viewing in the evenings.

9:34 And our position in the video advertising market is even stronger still. On the right hand chart there with 87% of all video ads seen by adults on a typical day in 2021 still viewed on broadcast channels or their VOD services, with that figure still around 70% of all ads for sixteen to thirty four year olds. And our job, of course, is to maximize our share of this video market across STV, the channel, and STV Player, the streaming service. And we start from a very strong position here. Our TV channel is still nearly four times bigger than our nearest advertising support competitor, channel four, and that gap is widening.

10:19 Our streaming service, STV Player, has more than tripled in size since 2018, continues to grow faster than any other broadcaster on demand service in The UK, and already reaches more than 50% of Scotland's sixteen to thirty four year olds. And taken together, STV and STV Player are generating a larger peak time audience than all of SVOD services combined with STV's channel alone more than twice the size of Netflix. And it's the growth of this combined audience across STV and STV Player that has driven ad revenues to new heights in 2021. We recorded our highest ever total advertising revenues 24% ahead of 2020, but also a full 10% ahead of STV's previous high watermark for advertising in 2016 as TV and VOD advertising reasserted itself as the most trusted and the most cost effective way of building advertisers' brands.

11:21 And once again, we've seen outperformance from STV controlled advertising lines in 2021, having dropped only 5% in 2020. Regional advertising, Scottish advertising, was up 22% last year and is now 16% higher even than our pre pandemic twenty nineteen revenues, powered by our STVGrowth Fund, which has brought over 320 new Scottish advertisers to television since we launched the fund nearly four years ago. And our digital VOD advertising on the STV player also enjoyed another year of very strong growth in 2021, up 38% on 2020, up 54% on 2019. Now we've invested heavily in including and improving the quality of the streaming experience on STV Player in the last three years, and this slide shows that it's really paying off us. With the highest rated streaming app by users across the main app stores in The UK, matching and beating not just our fellow UK broadcasters, but the big guys too, like Netflix and Amazon Prime.

12:30 And this is also being recognized by our industry peers through award nominations. But, of course, in TV, it's really all about the content. There's no doubt we're living through another golden age of television with more fantastic shows available than ever, particularly drama shows. So we at STV need to keep lifting the bar, keep putting more and more of our investment on screen. And this year, we'll have over a hundred and fifty hours of new UK original drama on on STV Player, 40% more hours than we had last year. And we're supplementing those original hours with huge amounts of player only acquired content, a further eighteen hundred hours last year alone, nearly half of which was drama from The UK and around the world.

13:19 And that makes a total of nearly a thousand hours of drama on the player with a new box set launching on the platform at the rate of more than one a week. Our acquired player only content shows that you can only get on our streaming service, not on our TV channel, is more popular than ever, doubling to 34,000,000 streams in 2021 and now making up 42% of our total VOD streams. That figure was only 6% at the start of 2019. And only a year since launching STV Player across The UK, already 22% of our VOD streams and 20% of our users are coming from outside Scotland, delivering a total of 17,000,000 streams in 2021.

14:06 This year will be our biggest year for new programming yet. Huge network dramas like trigger point, the Ipcris file, and our house. You may have seen some of them. The arrival of UK drama premieres on the STV Player for the first time, starting with a show called the commons starring Joanna Froggart of Downton Abbey fame. This is also a massive year for sport, obviously, culminating in the Qatar football world cup in November and December. And our family entertainment juggernauts are all back this year, including Saturday Night Takeaway and Britain's Got Talent. Basically, the more Ant and December, the more successful the year. And we are very clear on our digital strategy going forward. In terms of the streaming opportunity for us, the advertising supported video on demand market is huge, and it's growing quickly.

14:58 There is plenty of room in that market for STV Player to coexist with other competitors and continue to grow rapidly. Our offer is distinctive. It's rooted in UK content. It's all available for free, which we think is a strong message given the current cost of living crisis. And our UK wide distribution now gives us an even bigger addressable market, 10 times the size of just Scotland. And remember that given our size, relatively modest gains in market share are very material to us financially. So where are we focusing to drive growth? Well, priority number one, as I say, is continuous improvement of the content offer. We're excited about the growth opportunity across the whole of The UK, but we also see significant opportunity still in our home market of Scotland.

15:49 One of the ways we'll make the best of that is through an enhanced data strategy. By the end of the first half of twenty twenty two, signing into STV Player will be easier across all platforms, growing our registered user numbers as well as the user base of our loyalty scheme, STV Player VIP,

16:08 and in turn, driving engagement and longer viewing sessions amongst our users. Turning to our studios business, and our vision here is to build a world class content business based in Scotland, making big returning shows for all the major networks and streamers. We set ourselves a three year target to quadruple revenue to over £40,000,000. We made a very strong start towards that in 2021, our busiest, our most successful year to date by far. We now have seven returning series as you'll see on the left hand side of the chart, and that is the key for a successful production business. High quality, high volume returning series that provide predictability of earnings for the longer term.

16:57 The right hand side of the chart is even more encouraging though with a dozen new returnable series and two returnable dramas last year, including critically acclaimed prison drama Screw for channel four, which hopefully you've seen. But if you haven't, it's still available on all four. And we also have more large scale returnable formats to look forward to over the next few months, like new daytime quiz show Bridge of Lies, which is now two weeks into its run on BBC One in the afternoons. It's rating really well. Zodiac Island, our first big commission for one of the global streamers, Discovery Plus. And Blue Lights, a new police drama produced by our partners at Two Cities Television and filming in Belfast as we speak.

17:45 All of these shows coming up from STV Studios. But it's vital we don't ever stand still creatively in our business, so we were delighted to announce the addition of a ninth creative label earlier this month with an investment into quiz format specialists, Mighty Productions. Mighty has offices in London and in Glasgow, and its founders, Lynne Sutcliffe and Hugh Reycroft, are responsible for creating and producing some of the most successful quiz hits on British television, including Tipping Point, the weakest link, and impossible. Our deal with Mighty involves a sub million pound investment for an initial 25% stake. And similar to other investments we've made, we've secured a path to controlling the business over time in success at agreed multiples as the company moves into profit.

18:41 The particularly exciting thing about Mighty is that they already have four new TV series commissioned, including a new peak time quiz show called one and six zeros for channel four, which is already on air on Sunday evenings. Successful quiz formats are highly sought after because they get recommissioned in large volumes and can run for many years. And as such, Mighty is very complementary to the other unscripted investments we've made so far in our business. We also confirmed recently that we've agreed a three year extension to our exclusive drama partnership with Elaine Collins at Todd Productions. Elaine was the creator of successful returning dramas Vera for ITV and Shetland for BBC. Again, you may have seen one or or other of those.

19:32 And we remain very excited about Todd's development slate because Elaine will make her next drama in partnership with us. And that is the lifeblood of our production business, convincing talented people with great ideas and a great track record to come to STV to do more of their best work. And we now have a fantastic place fantastic team in place in studios. This slide gives you a sense of our growth ambition in our production business. Our current turnover already puts us in the top 5% of the 400 plus independent production companies operating in The UK right now, and there's no reason why we can't accelerate to be in the top 2% of companies over the years to come with the margin growing from 5% today towards 10% as we leverage our fixed cost base.

20:27 Our strategic focus remains on adding to our growing roster of returning series with a target of eight returning series by next year, achieving substantial commissioning success from the global streamers, and over time, expanding our slate by producing international versions of our formats. Given our strong cash position, you can also expect us to continue to make investments and acquisitions as a way of scaling up more quickly. As the big broadcasters increase their program spend outside London to represent the full breadth and diversity of The UK on screen, and the government also pursues its leveling up agenda across the country, there is no better time to be a TV producer based in Scotland.

21:13 And our aim is to become The UK's leading nations and regions production company over the coming years. Onto our social purpose. And as Scotland's public service broadcaster, we feel we have both an opportunity and a responsibility to help drive positive social change through the work we do. The last two years have obviously reminded us all what's important in life and in business, and these four pillars of our social purpose strategy on screen run through everything we do at STV. I'm proud that alongside our commercial success, we're making real progress towards the stretching targets we've set ourselves in our sustainability strategy, STV zero, our diversity and inclusion agenda both on and off screen, our continued support for young people living in poverty in Scotland through the STV children's appeal where we distributed £4,400,000 to nearly 14 and a half thousand families in Scotland last year, and crucially, how we make sure we look after our own people at STV as we all try to achieve a better work life balance post pandemic.

22:26 So on to the outlook and the prospects for 2022 are very positive. We have our strongest content lineup ever this year on TV and online. There is no change to our cost guidance with our previously announced £30,000,000 investment plan funding our growth ambitions in digital and in studios. The advertising market is off to a very strong start in 2022 with total advertising on STV expected to be up around 20% in q one and April up 10 to 15% despite April being up over 60% last year. We then move into a period of slightly tougher comparators in spring and summer fueled by Euro 2,020 last year before ending the year strongly with the football World Cup from Qatar.

23:16 Our production business, STV Studios, has also carried its encouraging growth momentum into 2022 with 11 new program commissions and over £15,000,000 of revenue already secured so far this year, and it's only the end of March. So, look, thank you for listening. I'll finish by leaving the key messages up on screen there and open up to any questions you might have. That's great, Simon. Thank you very much indeed for your presentation. Ladies and gentlemen, please do continue to submit your questions using the q and a tab situated on the right hand corner of your screen. But just like Simon takes a few moments to review those questions submitted already, I'd like to remind you that recording of this presentation, along with a copy of the slides and the published Q and A, can be accessed via your Investor Meet company dashboard, and we'll make those available to you when this meeting has concluded.

24:06 Simon, as you can see, we've had a number of questions from investors throughout today's presentation. So firstly, thank you to all of those that have taken time to submit the questions. And maybe, Simon, if I may start with the first one, which reads as follows. How confident are you in hitting your 2023 targets?

24:24 Well, you'd be pleased to hear we're very confident. We are firmly on track to hit those targets to double digital revenues to £20,000,000, quadruple production revenues to 40,000,000, and as I say, deliver 50% of our profit from outside broadcasting by 2023. Even in a year when linear broadcast advertising grew by 22%, which is this established part of the business, obviously, the bit we're actually trying to diversify away from, which is still quite resilient. Even in that year, we were able to grow our new areas even more quickly and increase our profits from outside broadcasting to 36%, thanks to more than £20,000,000 of revenue growth across studios and across digital. So and I guess what also gives us confidence in these new targets that we've set ourselves is our track record in delivering the old targets. So when we set out on our diversification journey in the in early twenty eighteen, our profits from outside traditional broadcasting were around 19%, and we set ourselves the initial target of getting to one third of our total profits by the end of twenty twenty, which we hit despite the effects of the pandemic. So we're confident we can take that next step of getting to at least 50% by the end of twenty twenty three.

25:38 That's great. Thank you very much indeed, Simon. I think you touched on the the studio business, but if there's any color you can add to the question, do you have planned investment into the studio business? I note that Sky are investing very heavily into a new studio just outside London. Well, I think probably what Nick means by the question, he he can correct me if I'm wrong, is not just into our production studios, physical studios because Sky are indeed investing in in physical studios. We don't think we need to do that bluntly because we think others are better placed to, and there is now quite a lot of competition for studios space. In other words, there are a number of new studios facilities opening up, including in Scotland. There's a new large entertainment and scripted studio opening up in the middle of Glasgow, Kelvin Hall, where we we were the first actually to to to use it to to film our prison drama Screw for channel four last last year.

26:37 So, Nick, we're we're taking advantage of the fact that there are others investing in more studios capability, and we will gladly fill it with the new commissions that we win. That's great. Thank you very much indeed. Next question around your advertising revenues. Why do you think you saw such an acceleration of advertising revenues? Well, there was clearly an element of COVID bounce back. The the market was down 10% or so in 2020 and and came back strongly. But as is inferred by the question, it bounced back significantly ahead of the pre COVID market. And I think there's been a reevaluation of of TV advertising in that time. You can see that during the pandemic, lots of people flocked to television for facts and information and and and trusted advice.

27:32 Netflix is brilliant, but if you switched on Netflix at any time in the last two years, you wouldn't have known there was a a pandemic going on. You wouldn't know now that there's a war in Ukraine. So we saw a real resurgence in in viewing and trust levels around broadcasting. That filtered into the advertising numbers. And you've seen, you know, the big advertising groups, likes of P and G and Unilever and others, redirect lots of spend into TV. Our biggest growth cohort in TV advertising is online native companies. So the likes of Amazon and Just Eat and HelloFresh and Cinch. You can't move for seeing adverts for Cinch these days. These are online native businesses.

28:18 They've chosen not online advertising to make themselves famous, but TV advertising because it works and it works brilliantly. That cohort of advertisers was up over 40% on TV last year. And I I also think what's behind the growth, particularly in our business, is that our regional business is growing very strongly and ahead of the market. We launched the STV Growth Fund now three and a half years ago where we subsidized the cost of of TV advertising. We helped make ads for local companies as well. And in doing that, we've welcomed we've done over 800 deals in that time. We've welcomed over 320 brand new advertisers to TV for the first time. So we've managed to give our regional ads market a boost as well. And then the final piece in the jigsaw is that our streaming service, STV player, is growing faster than anyone else's. So our ad revenues are growing very quickly too, up a further 38% this year. They grew even in the doldrum year of 2020 when we were sort of ravaged by the pandemic. So that is the reason for the growth in a nutshell.

29:27 That's great. Thank you very much indeed. Can you please comment on your strategy for closing off your pension deficit? Sure. Well, our our first strategy is obviously to to to make sure we put our contributions on a on an even keel for the long term, and we were very pleased in the last few months to close out the latest triennial valuation with our trustees in in record time, the fastest and most efficient agreement we've reached with trustees for many years. And the reason that is important is so that we don't spend all of our time or our CFO and team don't spend all of her time arguing with the trustees about the contributions, but instead work together with the trustees to close the deficit as much as possible.

30:17 We've created the space now to to actively manage that deficit. There's no there's no silver bullet there. You can see that, you know, small shifts in the discount rate, for example, or mortality assumptions that reflect people's living slightly longer can have a material impact. But we are comfortable with the level of the contributions right now. They stay flat for the next three years versus the last three years. And, of course, our main strategy, apart from active management of that deficit in tandem with the with the pension trustees is to grow bigger and bigger so that the proportion of the of the pension deficit grows smaller and smaller of of the total size of the business. Thank you very much indeed.

31:04 I guess a question that often gets asked around, I guess, share buybacks versus dividends. And why did you not opt for share buybacks as an alternative to the large increase in the dividend in your recent results? Well, I mean, firstly, we we are committed to a balanced approach to investment. Obviously, we are committed to that progressive dividend to servicing the the the pension deficit clearly also, but but investing for growth too. And I'm sure what's behind this question is, you know, if you really believe that you're undervalued, then why not get behind it with your own share buyback? And that is a fair question. We do think we are undervalued right now, but the best way we think of demonstrating to the market that that we're a more valuable business is to keep growing at the rate that we're growing. And I, when I got here, inherited a a share buyback program, which was around £10,000,000 or so.

32:07 And so we did do that relatively recently, but myself and the board decided that we had bluntly a better use for our funds, and that is investing for growth. We were three or four years ago a a company that was high yielding, but effectively x growth. And we've shown in the last four years that we can grow well ahead of the market. We did that again last year, and we have, we think, a very strong and compelling growth strategy for the next few years that requires that investment that I that I set out. So that's the reason. But, of course, we don't ever say say never to anything, and our our board keep those sorts of capital allocation decisions under close review.

32:57 That's great. Thank you very much indeed. What operational milestones should we look out for for the duration of the year? I think we've missed one around licensing. You're very good point. Yep. Yep. Let me let me retract the I think the question from Matthew reads as follows. Do you plan to expand the number of licensing agreements in place like those that you have with Facebook and Google? Well, the licensing agreements we have with Facebook and Google are around news and Facebook and Google's new news services where you remember there's been quite a lot of furore around the social platforms simply siphoning off news from the from the major public broadcasters and not paying for it. And, thankfully, we're we're in a slightly different position now where we have engaged directly with Facebook and Google who have their own news products, and they now pay us properly for taking our news because, you know, we have to spend a lot of money on the news, and we and it and it should be highly valued.

33:59 To the extent that other social platforms decide to roll out their news offerings, we will certainly engage with them. But in general, our licensing agreements across the industry are for new content. So in our digital business, you'll have clocked that we we don't just put up the ITV content on our streaming service, STV Play, although we do have all of that content exclusively for Scotland. We've also acquired through licensing agreements over three thousand hours of different content, mainly drama box sets over the last few years, and we will keep doing that. We have done upwards of 35 different licensing deals with independent producers, content owners, distributors.

34:45 We do that on both a minimum revenue guarantee and revenue share basis, and we have extremely positive relationships with them, and we'll continue to expand out those licensing arrangements over the years to come. That's great. Thanks, Simon. As I said, the the question before before that I read out, what operation milestones should we look for look out for for the duration of the year? Good question. So you'll see in our results presentation, actually, which is up on the website, that we have very clear KPIs across our broadcast, our digital, and our studios business. And in broadcast, it's about our share of viewing and in particular staying ahead of our closest benchmark, which is the ITV network for viewing, where we want to stay at least two share points ahead of them, and and indeed we we have been for the last while.

35:43 We track very carefully the the percentage of large TV shows in Scotland that are over half a million viewers that are on STV versus our other commercial competitors. And we have 98% of those large commercial audiences for TV shows on STV. And we so we track that very carefully. And we track in our broadcast business the number of new advertisers that we've attracted, Scottish advertisers that we've attracted to our to our business because you'll know that ITV handles our national advertising sales. And in digital, we track total viewing, so total consumption.

36:29 We track digital streams, and we track monthly active users, all of which are growing strongly and grew by sort of over 50% last year. And in studios, we track new commissions, so new business won. And in particular, we track returning series because the measure of it, the success of a and the foundation for success of a of a studios business is a large number of returning series that come back year in, year out. So you know when you wake up on the January 1 each year that you have a core number of series that you can count on rather than the slate being wiped clean. So watch out for those metrics in particular. We are intending actually to do a a further capital market session on on studios and on digital later this year that that will be open to people, and we'll follow-up, obviously, with our with our interim results after the summer.

37:30 That's great. And Peter asks, please may I ask where it might be possible to obtain a copy of the broker analysis and forecasts? That's a very good question, Peter. In a in a world post MiFID two, I'm not sure they are easily available unless they are subscribed to. But if you drop us a line, we can see what we can do there, if that's alright, Peter. And I'm sure Mark will let you know how to do that. But I I think post the new regulations around MiFID two, the availability of analyst notes is a little bit more constrained than it was. That's great. And, Peter, just on the feedback form when we put you out of this room, if you could just pass me on your details, and I'll pass them on to the team.

38:19 Simon, thank you very much indeed. You've answered pretty much every question that we've had in from investors. And of course, if we see any further questions from investors, we'll make those available to you after the call. I know investor feedback is particularly important to the company, and I will shortly redirect investors to give you their thoughts and their expectations. But before doing so, I wondered if I may just ask you for a few closing comments. Thank you. Well, look, firstly, thank you for for for tuning in and listening. Feel free to follow-up with any questions. We'd be delighted to come back to you on points of detail. I guess the main messages are that, you know, 2021 was obviously a record year for us in terms of revenue, profit, cash generation, propelling us well beyond our pre COVID high. So this wasn't just a COVID bounce back.

39:05 This is a continuation of a growth strategy that we've been delivering successfully over the last few years. We've got an unrivaled position as Scotland's largest TV channel and marketing platform, And we've also got two main growth pillars, our our digital business and our studios business, and both of those are growing strongly and profitably, crucially also in what are very exciting growth markets. The market for digital streaming, which everyone is talking about, and the market for global TV production, which has never been healthier. And that means we are fully on track to hit our diversification targets and moving ourselves away from just being a broadcast business. And together, those growth areas would generate over 50% of our operating profit by the end of next year, up from just over a third today, creating a more balanced, a more diversified business.

39:58 And when you combine that with our strong balance sheet, that gives us the scope to to pay a progressive dividend, but also crucially to invest for and to deliver long term growth for shareholders. So, look, thank you very much for listening. And as as Mark says, very happy to follow-up with anyone as required. That's great, Simon. Thank you once again for your time and for updating investors this afternoon. Ladies and gentlemen, please don't close the session as we'll now automatically redirect you to the opportunity to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, but I'm sure will be greatly valued by the company. Behalf of the management team of STV GROUP PLC, we'd like to thank you for attending today's presentation. That now concludes today's session. Good afternoon to you all.