GWR ‘Extremely Cautious’ On Advertising Outlook As Revenues Fall 3.5%

GWR Group this morning said that it too has not escaped the downturn in advertising, which has been affecting the sector worldwide for a number of months. Revenues for the six months to September 2001 are estimated to be 6.5% higher than for the same period last year, but this figure includes the contribution of acquisitions made by the company during the period. On a like for like basis, total revenues declined by 3.5%.

UK national advertising revenues are forecast to be flat in the second quarter compared to a decline of 15% in the first quarter; this averages out as an overall reduction of 8% in the six months to September. UK local advertising revenues have experienced less volatility with a six month forecast decline of 3% (4% in Q1 and 2% in Q2).

GWR’s greater exposure to local advertising, which has been least affected by the downturn, has allowed it to outperform the market.

The £1.3 million cost reduction from the restructuring of GWR’s internet ventures had now been fully implemented (see 46 Jobs Go As GWR Restructures Internet Operations). Further cost reductions are being made by focusing the company on its core radio businesses.

GWR says that it remains ‘extremely cautious’ about forecasting revenues, adding that ‘the timing of a return to sustainable revenue growth will happen only when confidence on the political and economic fronts returns.’

The group says that its strength is in its audiences, which are growing to record levels at Classic FM in the UK, Danubius in Hungary, Antenne Wien in Austria and Nova in Australia.

Shares in GWR Group were down 9p at 163½p by mid-morning today.