Chrysalis, the radio and music group, has announced a sharp fall in normalised pretax profits at its interim results. Half-yearly figures plummeted to £2.1 million for the six months ending February 2006, from £3.9 million in the same period last year – a reflection of the tough competition for advertisers among commercial stations.
However, despite the fall in profits, Chrysalis remained bullish, pointing out that both its music and radio divisions have outperformed market averages, with its radio revenues for example down 4.6% as opposed to a market drop of 8%.
Furthermore, since the end of February, things have improved, with radio revenues for the March to May quarter forecasted to rise by 10%, as opposed to a market rise of 2%, despite the fact the latest audience figures show Chrysalis’s London leader Heart has been overtaken by Emap’s Magic.
The music side of the business is less in doldrums than the radio sector, with Chrysalis Music having had “a very good first half of the 2006 financial year” according to chairman Chris Wright.
He added: “In the UK, Gnarls Barkley’s Crazy has spent at least seven consecutive weeks at Number One in the singles charts and is in the process of becoming a hit internationally.” And Chrysalis is also riding high on hits from Will Young and Dirty Pretty Things, among others.
Within the music division, the publishing sector was again the UK’s largest independent publisher in 2005 with a 15.6% share of the independent market (with Chrysalis capturing a 3.2% share of the entire UK music publishing market). Major earners for the company included OutKast and David Gray.
Chief executive Richard Huntingford sees the outperformance of rivals in both sectors as justification of his decision not to sell off the music division, despite pressure from some city experts.
“During the first six months of the year, our radio and music businesses have both continued to outperform their respective peers in difficult markets,” said Huntingford. “These encouraging results confirm that the benefits of focusing on these two well positioned businesses, as announced this time last year, are coming through as expected.”
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