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Thursday, 15 November, 2001, 17:34 GMT
Ad sales slump hits Capital Radio
Capital Radio: Strong performance from digital stations
Profits at the UK's largest commercial radio group have fallen sharply due to a decline in advertising revenues.
Capital Radio said profit before taxes for the full financial year fell by 27% to £30.1m ($42m; 37.8m euros), while sales dropped by 1% to £132m. The company blamed a "very tough" advertising market, and predicted that ad sales for October and November will fall by a further 7% on the year. "At present we are unable to forecast with any degree of accuracy for December and beyond," Capital Radio said in a statement. Share price firm However, Capital Radio's full-year profits were exactly in line with the company's own forecasts, reassuring nervous investors. Capital Radio shares rose on the news, climbing by 5.5% to 810p.
Commercial broadcasters such as Capital Radio, heavily dependent on advertising revenues, are particularly vulnerable. Digital revenues up While the company's profits from traditional analogue radio broadcasting fell by 20%, this was offset by tighter cost control and an increase in revenues from digital and internet-only stations. Capital Radio chief executive David Mansfield said that commercial radio broadcasting has a bright future despite this year's setback. "We are confident of the long-term prospects for radio advertising and retain our belief in the importance of aggressively expanding our national presence," he said in a statement.
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