Capital Radio stock tumbled 90p by 1:00pm this afternoon after what investors regarding as a disappointing set of figures emerging from the company’s AGM. The company reported a 12% increase in revenues during the last quarter of 2000 following the successful acquisition of Beat 106 and Century Radio. In today’s meeting Capital said like for like revenues across the three month period were up 4% and similar increases are expected for the first quarter of this year.
Planned levels of expenditure announced in November last year are still on track, despite a predicted downturn in adspend. “Although we remain cautious regarding current trends in the advertising market, we believe the longer term prospects for radio advertising are very positive,” a trading statement read.
Continued investment in digital radio is at the core of its plans. Yesterday Capital gained a further regional digital multiplex licence as part of the MXR consortium and the group hopes to reach 85% of the UK adult population with its digital output by 2002. Forming a national network of its alternative station Xfm across its digital licence gains is a crucial part of this plan.
Capital Interactive, which launched the first of three planned web stations last year, will also take a large chunk of this year’s investment. A spokesperson for the group told MediaTel that the final two web stations are expected to roll out in the next six months.
Shares jumped briefly to 1,160p yesterday following the MXR consortium’s clinch of the South Wales digital licence, but eventually closed down 12½p at 1,135p. The further fall following this morning’s statement left stock at 1,045p. The recommendations consensus for Capital Radio is Neutral, although Merrill Lynch yesterday downgraded the group to Sell, which is likely to have pushed shares down further. ABN Amro is predicting a tough Q2 (Capital’s financial Q3) for the radio industry as dotcom is considerably down on its peak at that point in 2000 and the year on year affect of the Euro 2000 activity will also be felt. As a result ABN has cut its full year growth forecast from 6.4% to 4.0%.
Merrill Lynch: Sell ABN Amro: Reduce
