Capital Shares Plummet As Trading Statement Warns Of Half Year Revenue Below Expectations

Capital Radio is expecting half year revenue increases to fall below the expectations indicated in its AGM trading statement at the end of January. The prediction was made in a pre-closed period trading statement issued today in respect of the six months ended 31 March and comes as a consequence of the slowdown in the UK advertising market during the second quarter.

Prior to this trading update being released, shares in Capital were downgraded by UBS Warburg (see Sharewatch). As a result, shares in the company had fallen over 16% from the closing price last Friday of £10.50, to £8.77½ by close of trading yesterday. By 10.30am today shares had dropped a further 22.5% to £6.80.

Revenue for the period is expected to show an increase of 8%, reflecting acquisitions made during last year, while like for like revenues are expected to increase by 2%, compared to the 4% expected in January. The company stated today that although it was too early to forecast full year profit levels, if the prevailing condition of the market continues into the second half, profit levels at the end of the 12 months could be as much as 10% lower than the previous year.

Despite the short-term difficulties, Capital continues to present a confident stance on the long term prospects for radio, especially with the advent of digital and internet delivery methods, both areas in which the company has developing interests.

Capital Radio: 020 7766 6000

Subscribers can access further information on Capital and other radio groups by selecting “Radio” from the drop-down box at the top of this page.