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Chrysalis tunes in to digital radio

CHRYSALIS, the media group run by Chris Wright, is expected to bid for the London digital radio licence this week ahead of the launch of digital radio in October.

The company, operator of the Heart FM stations, is also expected to bid for the North-west franchise and those in Birmingham and the North-east, where it has bought the Choice FM and Galaxy stations.

Radio is an increasingly important part of Chrysalis's operations, underlined by the appointment yesterday of Richard Huntingford as managing director. Mr Huntingford, replacing Phillip McDanell, was responsible for the group's entry into radio and is highly regarded in the industry.

Although Chrysalis reported reduced half-year losses of pounds 642,000 in the half to February, the group would have made a profit had it not been for its strategic investments in radio. It bought the Choice FM business for pounds 6m and is investing in rebranding it as Galaxy 102.2.

Looking forward, Chrysalis will be increasing its spending on Galaxy in the North-east in the second half, although this will be offset by increased profitability in the division. Overall, the radio investments will keep Chrysalis in the red to the tune of around pounds 1.3m in the full year, according to Simon Lapthorne at Granville.

In music the picture is more mixed. Music losses of pounds 459,000 in the first six months included a healthy profit from the UK publishing division, which benefited from hits from teen group B*Witched and former EastEnders star Martine McCutcheon. But the Echo record label is still not performing, and analysts say the jury is out on how long the company will give it to turn the corner.

In television there was good news, with Midsomer Murders sold to more than 40 countries, including America, and other successful shows such as Babes in the Wood and A Many Splintered Thing aired during the period.

It has been a volatile six months for the Chrysalis share price, which has recovered from 540p to 766p yesterday, unchanged on the day. But Granville has a target price of 880p. Worth a look.