TWG Turns Around In 2003 To Reach £2.3 Million Profit
The Wireless Group has announced that adjusted operating profits reached £2.3 million in the twelve months to December 2003, up by £4.6 million on the previous year when losses were £2.3 million.
Turnover increased to £32.6 million from £28.5 million in 2002. This gives TWG a turnover increase of 14.3%, beating industry average revenue increase of 6.8%.
The group’s commercial radio station, talkSPORT, has been established as a profitable operation. Kelvin MacKenzie, chairman and chief executive, said: “talkSPORT was consistently ranked as the UK’s number one commercial radio station and made a 2003 profit of £1.2 million [excluding central and selling costs]”.
However, this statement is based on independent research carried out on behalf of TWG by research company GfK and not the industry recognised method of gathering audience ratings as conducted by RAJAR. MacKenzie is engaged in a legal battle with RAJAR. He is claiming £66 million worth of damages because he believes that the diary based system used by RAJAR to gather radio ratings is ‘fatally flawed’ due to its reliance on respondents’ memory.
TWG has been using the GfK wristwatch method to gather its own ratings figures. MacKenzie said yesterday that the new system is ‘twice as accurate’.
The group has also seen a dramatic improvement in the operating performance of its 13 local radio stations. Operating profits rose to £5.6 million in 2003. TWG added to its portfolio of local stations with the £8.1 million take over of Forever Broadcasting this year and three new stations have been set up in Chesterfield, Wolverhampton and Bolton.
RAJAR figures for the local stations were mixed. The stations based in the North West all improved their market share but heritage stations elsewhere faced stiff competition from new regional stations.
TWG’s shareholding in Digital Radio Group was increased in 2003 from 23.6% to 30.2%, making the group one of the largest digital multiplex operators in the UK. MacKenzie said: “We continue to believe that the take up of digital radio will continue to accelerate and that the foundations we are building will be for the long term benefit of the Group.”
Despite 2003 being a better year than 2002, operating losses still reached £10.7 million (pre-tax £11.2 million), when not adjusted to exclude goodwill amortisation.
TWG reports that the first quarter of 2004 has produced revenues up 18.7% when compared to the first three months of last year. “This is a good start for the year in which we see a lot of sport activity and opportunity. Improving markets does not mean we have taken our eye off costs, which are rigorously controlled,” says MacKenzie.
Wireless Group: 020 7269 7180
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