Capital Radio Continues To Impede GCap Media’s Growth

The company made £8.4 million compared to £12.4 million in the same period last year. Flagship London station, Capital Radio, has seen its revenue down by £6.3 million year on year, deflated due to a difficult ad market and the implementation of its no more than two ads policy. Other stations have also implemented the move.

GCap reported revenues were down 8.4% year on year to £102.2 million. However, excluding Capital Radio they were down just 4%.

The company said that Capital Radio’s results are in line with expectations and that a recovery plan is on track with the launch of marketing activity, which it began in October.

“Despite a very difficult advertising market, we are confident that we are taking the right steps to align our business to a rapidly changing environment,” chief executive of GCap Media, Ralph Bernard, said in a statement.

“During the first half, we have achieved a series of key operational goals. We have increased reach, share and hours across the One Network and entered the next phase of our recovery plan for Capital Radio with the launch of a new marketing campaign.

“The sale of the two Century stations has strengthened our balance sheet and given us greater financial flexibility to develop our portfolio of national brands, with two new stations set to go on air within the next six months.”

The results come at the close of a difficult year for GCap Media. In September, the company predicted that revenues for the six months ending September 30 were set to fall by 9% year on year (see GCap Expects 9% Fall In Revenues), whilst following the release of the latest RAJAR figures, the group’s share price dropped to a record low of 186.50p (see GCap Share Price Falls Following RAJAR Audience Figures).

Its advertising revenues were down 6% year on year for the quarter ending 30 June 2006, with total revenues excluding Capital Radio down 3% year on year (see GCap Media’s Ad Revenue Drops).