Capital Radio saw a leap in shares today on the back of a good performance by its flagship station Capital 95.8FM in yesterday’s RAJAR results, but Merrill Lynch analysts are not convinced that the company is out of trouble.
The broker described Capital’s regaining of ground in the London market as a “catch-up” rather than a “seismic performance shift.”
Capital reported a 1.5% increase in weekly reach in the last quarter of 2003, compared to the previous quarter. But year on year weekly reach was down 6.3% to just over 2.3 million, while rival London station, Heart 106.2FM, was up 5% to just below the 2 million mark.
Merrill Lynch believes that Capital is still at risk, particularly in the light of the departure of its breakfast show host Chris Tarrant this spring. He is to be replaced by Johnny Vaughan.
Merrill Lynch is also disappointed by the performance of SMG station Virgin. Virgin FM’s weekly percentage reach fell from 10% to 8%, and its AM station was static at 4%.
The broker believes Virgin is “sub-scale” in today’s analogue world and expects its revenue to come under pressure in the first half of 2003.
| Virgin RAJAR Since 2002 |
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| Weekly Reach % |
4Q02 |
1Q03 |
2Q03 |
3Q03 |
4Q03 |
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| Virgin FM London |
9.0% |
9.0% |
9.0% |
10.0% |
8.0% |
| Virgin AM London |
4.0% |
4.0% |
4.0% |
4.0% |
4.0% |
| Total Virgin |
6.0% |
6.0% |
6.0% |
6.0% |
5.0% |
| |
|
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| Share of Listening |
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| Virgin FM London |
2.3% |
2.4% |
2.1% |
2.6% |
1.8% |
| Virgin AM London |
1.1% |
1.1% |
1.1% |
1.2% |
1.0% |
| Total Virgin |
1.6% |
1.6% |
1.6% |
1.7% |
1.4% |
| Source: Rajar, Merrill Lynch |
