First quarter underlying revenues at GWR Group were up by 0.4% year on year, driven by a good performance at the Local Radio Group (LRG).
Strong national spend helped push LRG’s Q1 revenues up by 8%. At Classic FM, however, advertising has remained volatile, with a 16% dive in Q1 revenues, largely as a result of the peak last year surrounding the World Cup and the Golden Jubilee. When compared to Q1 2001, Classic FM’s revenue dipped just 2.0%.
Digital radio
GWR Group has been a keen proponent of digital audio broadcasting (DAB) and has built up stakes in a number of key digital licences. The company today said that its digital assets will become highly valued ‘in due course’.
A strong digital radio marketing push has already begun from the BBC and electrical retailer Dixons claims that 50% of radio receivers sold are now digital. Comet also forecasts that a third of its radio sales this Christmas will be digital.
In addition, it has been announced today that Sainsbury’s will be stocking digital radios in 125 of its stores, whilst Tesco’s will sell DAB equipment in 20 of its top stores. The Digital Radio Development Bureau (DRDB) is forecasting cumulative sales of 500,000 sets by the end of 2003 and one million by December 2004.
Outlook
GWR says it is now in a much stronger financial position, with net debt having been reduced by £100 million.
Chairman Ralph Bernard hinted at possible acquisitions in the medium-term, saying that the relaxation of media ownership rules in the new Communications Act leave the group ‘well-positioned in the industry’.
“GWR has quality assets in analogue and digital radio which will enable us to play an important part in the future of the industry,” he said.
The advertising market continues to be uncertain but LRG revenue is outperforming expectations. The trading outlook remains unchanged and the Board say it is confident of delivering a satisfactory result for the year.
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