ABN AMRO has cut its 2002 profit forecast for Capital Radio by 7% to £35.5m, following confirmation in its interim results yesterday of a fall in profits and a revision of its full year expectations (see City News).
A major factor in the revenue falls has been what the broker calls a “sharp deterioration in the radio advertising market.” This led to a 0.4% drop in revenues for established Capital stations and an 8% fall in profits, in part thanks to a £1.5m increase in marketing spend for Q1. Developing stations such as Beat FM, Xfm and Century FM saw their losses increase from £0.9m to £3.9m. ABN AMRO says it does not rule out further deterioration in the advertising outlook as a possibility.
Despite the profit warning, Capital share rallied yesterday, to end up 62½p at £7.25½. However, by 11am today shares had slipped 20p to £7.32½.
