Capital Radio tunes in to 52% rise

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The Independent Online
Capital Radio, exceeding analysts' forecasts, reported pre-tax profit in the half-year to March of pounds 12.7m, up 52 per cent, on revenues 35 per cent higher at pounds 31.9m.

Richard Eyre, managing director, credited structural changes in the way the company attracts advertisers, particularly through providing a single point of purchase for air time on Capital's 11 stations.

The company is also riding a boom in radio advertising generally. For the second time in two years, radio was the fastest-growing medium in the UK, rising 23 per cent in 1994 alone.

"We're sure this is a long-term trend," Mr Eyre said. "We've managed to get advertisers to view radio as a medium of first choice, rather than as an afterthought."

He added that growth in all business segments continued into the second half. The London market, which represents more than half of the company's revenues, was particularly buoyant.

Analysts said they would be raising their full-year forecasts by pounds 1m- pounds 2m, to a range of pounds 23m-pounds 26m.

Capital has grown partly through acquisition in recent years, buying the third- and sixth-largest radio groups, but has no present plans to acquire additional stations.

Analysts have suggested that regional cable television might present a challenge to UK radio stations by competing for advertisers. Mr Eyre said he was "not at all worried".

"The British TV viewer is already so well served by television that I don't believe regional cable will become an important part of people's daily lives."

Three of Capital's licences are up for renewal this year, including those serving Kent and Sussex. Mr Eyre said he was confident all three licences would be renewed.