Insight Analysis: UK Radio Sector Update
Gradually improving trading figures are expected from the UK radio sector, even though there may be no significant recovery just yet, according to analysts at Merrill Lynch.
UBC Media has this morning indicated that its airtime revenues were up by 2% (see UBC Figures Show Positive Radio Revenue Growth). This is a much stronger performance than experienced at EMAP’s stations, which saw H1 revenues fall 7% (see EMAP Remains Resilient In Tough Markets).
GWR and Capital are expected to be slightly better, but there is still no sea change in sentiment, says Merrill. However, the broker does see strong long-term growth in the radio sector, once the tide starts turning.
GWR’s sales in the six months to September are forecast to be up 1%, with local sales down 5% and Classic FM up 14%; in the year to March 2003 growth should be around 2.2%. Capital’s figures will cover the twelve months to September and are likely to show a decline of 7% in the six months to March 2002, recovering to -2.5% for the full year to September (implying a 2% growth in H2).
Share prices Despite suffering the most in the current downturn, shares in EMAP have significantly outperformed those of other radio-related groups over the last twelve months.
In fact, it is EMAP’s strong performance in the markets that has pushed the average of radio-related companies into positive figures, at +3.4% for the period, as shown.
Forecasts A graph showing the most recent revenue forecasts from the Advertising Association (AA) is given here, along with confirmed data from the Radio Advertising Bureau (RAB).
AA data for Q2 2002 puts radio revenue down -1.1%, slightly underperforming the total advertising average, which saw a 0.1% decline (see UK Ad Decline Stabilises In Second Quarter). Zenith Optimedia is expecting a -2.7% growth for the full year.