UK Radio Trading Remains Weak Into Q4
The unexpectedly poor Q3 radio trading in the UK appears to be continuing into October, although there is currently very little visibility beyond that, according to analysts at Merrill Lynch.
EMAP’s first half saw revenues down by 7% (see EMAP Remains Resilient In Tough Markets) and Capital Radio’s full year to September showed sales down by 2% after a H1 drop of 7% (see Capital Radio Sees 2% Revenue Decline, Tarrant Stays). GWR Group’s sales were down 2% (see GWR Revenues Stay Flat In First Half), as were Scottish Radio Holdings’ (see SRH Radio Revenues Drop 2% In Full Year). Chrysalis Radio continues to outperform the market, with a 9.5% revenue rise in the full year to August (see Chrysalis Revenues 15%pt Stronger Than Radio Sector).
The trading of the major radio groups relative to the radio market as a whole is shown here.
| Like For Like UK Radio Revenues | ||||||||
| 2001 | 2002 | |||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3F | Q4F | |
| RAB market | 0.8 | -12.2 | -6.4 | -11.6 | 0.5 | 2.1 | -5.0 | 0.0 |
| Capital Radio | 0.0 | -16.0 | -9.0 | -9.0 | -5.0 | 3.0 | 1.0 | 2.0 |
| GWR | 7.8 | -10.5 | 0.5 | -1.0 | -0.6 | 4.9 | -7.0 | 2.6 |
| EMAP | – | -6.0 | -4.0 | -14.0 | -16.0 | -7.0 | -7.0 | -3.0 |
| Source: As above, Merrill Lynch estimates | ||||||||
Communications Bill The Communications Bill will get a reading at the same time as the Queen’s speech on 13 November. Merrill Lynch believes that non-EU ownership of UK radio companies will be allowed and that the regional plurality rules could be relaxed.
When definitive new rules do emerge they will permit operators to plan mergers and acquisitions more effectively, although major activity is not likely in the short-term, due to market conditions, say analysts. A priority for operators are domestic mergers, which will bring with them synergy cost-savings. These are more likely than overseas acquisitions, says the broker’s report.