Total revenue fell nine percent to £200.1 million while pre-tax profit fell from £22.2 ($43.9) million to £14.4 (28.4) million in preliminary results for the year to March 31 at the UK’s largest commercial radio network, thanks to an offline advertising market that was gloomy in all but the final quarter. Although the Advertising Association forecast UK radio ad revenues, which account for 84 percent of the group’s revenue, would rise 0.4 percent year-on-year, they actually fell 5.2 percent, GCap said.
– Internet: In online, GCap made a £1.6 ($3.1) million profit on revenues of £4.5 ($8.9) million, based on 1.4 million unique users. But GCap wants to increase the available ad inventory on its sites so, noting a stronger online ad market, the group announced it would invest an extra £2.1 ($4.5) million to transform its stations’ websites into “best-in-class music destinations” including artist databases, video, communities, customizable content and recommendations. That’s on top of an expected £2.5 ($4.9) million online spend for 2007/08 and £5.9 ($11.6) million for 2008/09. The money will be invested in 2008 with the aim of substantially driving up revenue by 2010. The statement noted the move will require new staff and technology “to design and develop more innovative online products such as personalized radio, on-demand audio and video, music discovery and user-generated content”. It’s a grab-bag of buzzwords that essentially extends the Mi-Xfm personalized player trial and the Xfm Uploaded – but first stop will be updating the network’s aging web publishing platform.
– Digital:The group’s decision to scrap DJs on Xfm between 10am and 4pm, and turn programming over to cellphone-toting, web-browsing audience members (an approach modeled on its Chill format), will not kick in until the next financial period but has so far drawn a mixed response from listeners and former DJs.
Finally, GCap’s statement noted that “radio listening amongst the iPod and MySpace generation remains high, with 89 percent of 15-to-24-year-olds listening to an average of 19 hours of radio a week”. It must hope the slight upturn in advertising fortunes seen in the last quarter will continue.
Statement/Financials | Presentation