SMG Issues Profit Warning And Sees Shares Fall
Scottish Media Group, owner of Virgin Radio, has seen its shares drop by 28% today after issuing a profits warning.
However, SMG said that Virgin Radio and its outdoor advertising business Primesight are outperforming their respective markets.
In September, SMG announced that it was to sell off its cinema and outdoor advertising businesses, Pearl & Dean and Primesight (see SMG To Sell Pearl & Dean And Primesight), and said today that it has received a significant number of expressions of interest for both.
SMG said: “Due to the high operational gearing of its television and cinema businesses, the board now believes that SMG’s profits for the full year 2006 will fall materially behind its previous expectations. As a result, the Group is in discussions with its banks in relation to a potential breach of certain of its financial covenants and a satisfactory outcome is expected.
Chris Masters, chairman of SMG, is currently in discussions with potential candidates for the chief executive role which was left vacant following Andrew Flanagan’s resignation in July.
