SRH Cautious On Outlook As Ad Slowdown Hits Profits
Scottish Radio Holdings has this morning issued a cautious outlook for its performance for the coming year, as interim financial results show a 5% drop in profit before tax to £7.8 million.
Scottish Radio’s Score Press division saw revenues grow 55% year on year thanks mainly to the purchase of Ireland’s Kilkenny People Holdings and Ireland on Sunday last summer. The group’s outdoor business saw revenues rise by 15% on a like for like basis, following a number of ‘significant’ contract wins.
It is in the company’s core business of radio, however, that the picture is a little bleaker. Radio revenues dropped by 3.5%, against an industry average of 6.4% growth. National radio revenue was particularly weak for SRH, falling 8% whilst the industry rose by 11.9%. This was offset slightly by a market outperformance in local radio revenue – up 2% against the industry’s 6.5% decline.
Earlier in the week Scottish Radio said that it had called off merger talks with a number of interested parties – a move which has caused the company’s stock to subsequently lose more than 10% of its value (see Scottish Radio Ends Takeover Talks As SMG Declines To Reveal Its Intentions). A coinciding profits warning from Capital Radio depressed the radio sector’s stock even further.
This morning SRH said it feels that its businesses are in a strong position competitively, operationally and strategically, underpinned by a strong and ungeared balance sheet. Nevertheless, the Board remains cautious about the short-term outlook for UK advertising spend. The medium-term prospects for the key markets of radio, local press and outdoor poster advertising are more positive, it says.