Capital Radio Profits Fall 27% Following Ad Downturn

Capital Radio has this morning reported a gloomy set of financial results, which show a 27% decline in pre-tax profit for the twelve months ended 30 September to £30.1 million. The company is saying that conditions remain tough as a result of the continued downturn in advertising, adding that there is virtually no visibility for December and beyond.

Revenues at Capital’s established stations fell by 9% to £106.8 million; total revenues at the group were down 1% at £123.2 million. Analogue radio operating profit fell by 20% to £36.5 million.

There is likely to be a 7% decline in revenues in the first two months of the company’s financial year – October and November – the group said. With visibility barely extended to December, the outlook is not positive.

As a result Capital says it will manage its business on the assumption that the difficult advertising conditions will remain for the rest of its financial year. However, the company remains confident that it is in a strong position to benefit when the market conditions improve, which, according to forecasts, may not be not until 2003.

David Mansfield, chief executive, commenting on the year’s performance, said: “This year has been challenging for Capital Radio as the media industry faced difficult trading conditions resulting from the economic slowdown. Though the current market conditions may continue for some time, with our strong brands, healthy balance sheet and focused management team we will weather the downturn. We are confident of the long-term prospects for radio advertising and retain our belief in the importance of aggressively expanding our national presence.”

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