Chrysalis warning on advertising revenues hits radio shares

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The Independent Online

Radio companies' share prices fell after a warning from Chrysalis that first-quarter advertising revenues would be flat, hit by lower spending from the fast-moving consumer goods sector.

Radio companies' share prices fell after a warning from Chrysalis that first-quarter advertising revenues would be flat, hit by lower spending from the fast-moving consumer goods sector.

Chrysalis, which operates the LBC, Heart and Galaxy stations, warned at its annual results yesterday that revenues had proved particularly weak in October, which suggested revenues for the industry as a whole would be "at best flat".

Shares in Chrysalis, whose chairman and founder is Chris Wright, ended 6.4 per cent lower at 164p, while GWR fell 3.4 per cent. Shares in Capital, the company which GWR is merging with, fell 2 per cent. Emap shares ended 3 per cent lower.

Richard Huntingford, the chief executive of Chrysalis, said: "Our new financial year started at the beginning of September. We got off to a good start with positive growth. Suddenly at the end of the first week in October it went very quiet, particularly among the national advertisers.

"It was an industry-wide phenomenon. It was three weeks of pretty soft markets. The fast-moving consumer goods sector, which has been a strong supporter of the radio sector over the last nine months, seemed not to be spending the same sort of money."

Excluding Chrysalis Television, which was sold in August 2003, sales were up 3.2 per cent to £164m for the 12 months to 31 August. Profits before tax and exceptionals rose 22.2 per cent to £7m.

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