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Thursday, 27 September, 2001, 09:03 GMT 10:03 UK
Advertising downturn hits radio
Capital Radio HQ in Leicester Square
Capital radio is upbeat about the future of radio advertising
Two of the UK's leading commercial radio groups, Capital and GWR, have said they are seeing falling revenues because of the ongoing slump in advertising.

Capital Radio said it expected revenues during the last part of the year to drop by 9%.

Meanwhile GWR Group - which owns Classic FM as well as a number of regional stations - has forecast an 8% fall in national advertising revenues for the first half of the year.

Spending on advertising has been cut as companies try to make savings in the face of an economic slowdown.

Capital 'positive' on prospects

Capital said it was expecting fourth quarter revenues to be down by 9% compared to the same period last year.

Coming off the back of a 16% fall during the previous quarter, the company has now said that it is expecting revenues for the whole year to have fallen by 6%.

But Capital remained upbeat about prospects for the industry.

"Although we remain cautious regarding current trends in the worldwide advertising market, we believe the longer term prospects for radio advertising are very positive" the company said in a statement.

The company also said it still expected to hit its full year pre-tax profits target of 30m.

Traders in the City took heart from this, and in early trade Capital's shares were up 7.5p at 505p

GWR also cautious

GWR admitted the group had "not escaped" the downturn in advertising and said it remained cautious about forecasting future income.

It said total revenues were down 3.5% for the six months to September, and it predicted an 8% drop in advertising revenues over the same period.

But like Capital, GWR was putting a brave face on things.

"The board is confident that, with our lower cost base, profits will again grow rapidly when the market recovers" it said.

In early trade in Thursday shares in GWR were down 12.5p to 160p.

See also:

17 Jul 01 | TV and Radio
Clouds ahead for commercial radio
11 Sep 01 | Business
Media giant confirms ITV's woes
07 Aug 01 | Business
Ad agencies weather slowdown
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