Capital Stock Recovers Despite Expected Profits Warning
The predicted profits warning from Capital Radio was confirmed today as the group released its interim financial results, with the message that the advertising market has deteriorated further since its first warning in March (see Capital Shares Plummet As Trading Statement Warns Of Half Year Revenue Below Expectations).
At that time Capital said that due to a weakening advertising market profits for the full year were likely to come in 10% lower than in 2000. This morning it said that the situation has worsened over the past weeks and it now expects underlying profits to be some 25% down on the £41.3 million of last year.
The group said that in the April to June period last year radio revenues grew by 25.4%, largely due to the dotcom marketing boom. During April and May this year revenues were down by 15%. Underlying profit before tax came in at £18.3 million, down 18%, but better than consensus forecasts of £16.5 million. Like for like turnover was up 2%, of which spot advertising was up 1%.
Capital stock sunk yesterday as the Financial Times pre-empted the profits warning of this morning. However, in trading today the shares have recovered and were up 47˝p at 737˝p by late morning.
David Mansfield, chief executive of Capital Radio, remained upbeat: “Although it has been a difficult six months for the media sector as a whole and the outlook remains uncertain, we are encouraged that commercial radio has outperformed other broadcast media during this period.
“We believe that national advertisers will increasingly turn to radio to reach their target audiences cost-effectively. With a national presence, increased audiences and a 29% share of national radio advertising revenue Capital Radio is in a strong position to benefit from this growth in the future.”
Capital Radio: 020 7766 6000 www.capitalradiogroup.com
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