Capital Holds Up Despite DJ Departure

News that Chris Tarrant is to leave Capital Radio does not seem to have had an undue effect on the station’s stock with City fears calmed by the prospective arrival of Johnny Vaughan to present the 95.8 FM breakfast show.

Tarrant has been regarded as a lynchpin figure at Capital. His show attracts around 1.65 million listeners in the morning and is reckoned to account for up to 15% of overall group profit.

Shares in the company fell by around 5% yesterday but the downturn did not occur until hours after the DJ’s decision to quit was announced, indicating that other factors were at work.

In a recent trading statement, Capital Radio said that it was expecting a 4% fall in airtime advertising revenues for the year ending 30 October. This takes into a account a 3% decline in the second half, slightly better than anticipated by Merrill Lynch.

95.8 Capital FM has been losing market share in the competitive London market and steps have been taken to reposition the station to its core youth audience. The hiring of Vaughan, at 37, almost twenty years junior to Tarrant, can only help in this regard.

Merrill remains neutral on Capital and sees no reason to react adversely to the the breakfast show switch. Shares in the group remained unchanged at 422.5p on Wednesday.

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