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Last Updated: Wednesday, 24 May 2006, 10:12 GMT 11:12 UK
Merger costs hit profits at GCap
Radio DJ
Capital believes fewer adverts will attract listeners
A weak advertising market has hit profits at GCap Media, the UK's leading commercial radio firm, while revenues at flagship Capital Radio have slumped.

Costs associated with the merger of Capital Radio and GWR hurt GCap Media, which reported pre-tax profits of 22.2m, as against 37.3m last year.

In its first annual results as a single company, GCap said its businesses had been disrupted by the merger process.

It also said changes to its advertising strategy were affecting its revenues.

Fewer adverts

Flagship London station Capital Radio overhauled its advertising approach in December, running only two adverts consecutively compared to up to nine by some of its rivals.

We are creating the strategy to deliver improved profitability by developing strong national networks
Ralph Bernard, GCap Media chief executive

GCap Media said the shift had enabled advertisers to stand out more and had improved recognition of ads by listeners.

However, the move resulted in a 2.6m fall in Capital Radio's revenues in the final quarter of the year.

GCap warned that the situation had not improved in recent months, with the station's revenues expected to be down about 26% in April and May, compared to the same months last year.

Overall, GCap Media said a weak advertising market and a decline in listeners at many of its leading stations had hurt its performance.

Merger disruption

The company has revamped programming at Capital Radio and other stations in an effort to turn their fortunes around.

GCap was also lumbered with major costs from last year's merger, which the firm said had caused "significant disruption".

However, the firm said it had made progress in building the company against the backdrop of a "difficult advertising environment".

"Media markets are changing fast and at GCap, we are creating the strategy to deliver improved profitability by developing strong national networks and increasing audiences in the most commercially important demographics," said GCap Media chief executive Ralph Bernard.




SEE ALSO:
GCap pays price of short ad slots
24 Mar 06 |  Business
Radio group hit by profit slide
24 Nov 05 |  Business
Caution as radio group launches
09 May 05 |  Business


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