GWR Achieves Objectives In ‘Difficult’ Conditions
Profits at GWR Group increased by more than 11% in the year to March 31, according to financial results released this morning. Figures were in line with expectations (see GWR Sees Radio Revenues Down By 3.9% In Q4) and reflected the success of restructuring efforts over the past twelve months.
Profits before tax and one-off charges amounted to £8.6 million, compared to £7.7 million last year. In the past year GWR has embarked on a policy of consolidation, selling non-profitable assets in order to reduce losses and focus on its core UK stations. Disposals included the company’s 25% stake in DMG Australia (see GWR Offloads DMG Radio Australia And Reduces Debt) and the 49% shareholding in London News Radio (see Chrysalis Takes GWR’s LNR And Sells Galaxy 101).
Net debt has been reduced to below £100 million mark and the company has been able to pour resources into the lucrative national market and invest in digital radio.
GWR was particularly encouraged by the performance of Classic FM, which now reaches almost seven million adults a week and accounts for more than a fifth of the group’s UK income. The emphasis on the UK-wide network is shown by the fact that national revenues were up 0.6% year on year while local revenues fell 6.6%.
Ralph Bernard, executive chairman, commented: “GWR has delivered its plan despite market conditions. We have reduced debt, disposed of non-core assets, reorganised and restructured our UK business and developed digital radio.”
One sour note was the failed attempt to buy Chrysalis Radio’s Galaxy 101 and merge it with Vibe FM. Following the Competition Commission’s decision to block the takeover (see Watchdog Blocks GWR-Backed Acquisition Of Galaxy 101), GWR has decided to sell its stake in Vibe to Scottish Radio Holdings for £17.6 million. It has also sold its Hungarian radio stations to venture capitalists for £18 million (see GWR Sells Vibe Following Competition Rebuttal).
GWR maintains that UK trading conditions remain ‘difficult’ but Bernard believes that streamlining has had a positive effect and provided the company with a firm foothold for the future.
“The current year has started well and to budget,” he said. “We will see both the operational and financial benefits of the action taken last year enhance the performance of the group this year. The group as a whole is stronger and better positioned to take advantage of any upturn in our markets.”
Shares in GWR were up 9p at 174p at 11am today.
