The combined Capital Radio-GWR group, known as GCap Media, marked its first day as a merged company yesterday with a stinging profits warning.
The company revealed that trading declined in April, adding that it was not possible to say when advertising sales may recover. For April, revenues at Capital Radio were 21 per cent lower and 15 per cent down at GWR, making the combined GCap Media revenue for the month 17 per cent below last year.
Ralph Bernard, the chairman of GCap, said the early timing of Easter, the general election and some of their major advertisers going bust were all factors - he singled out bankruptcies at Rover and Allders.
He said: "Weak consumer confidence and low spends from traditional top 10 radio advertisers were the principal factors affecting this weak demand, although April and to an extent May have also been impacted by specific one-off factors including Easter and the general election.
"As in the past visibility is limited. The GCap Media board is taking a cautious view on overall market conditions and currently expects the principal factors that impacted April to continue in May and June."
GCap shares closed down more than 7 per cent at 310p, as analysts slashed profits forecasts. The stock has fallen from more than 420p in the past six weeks.
The trading update from GCap was accompanied by interim figures from Capital Radio, which covered the six months to the end of March. Capital saw revenues decrease 1 per cent for the period, to £58.5m, with pre-tax profits, before exceptionals and goodwill, falling by £1.3m to £10.8m.
Advertising expenditure by retailers, Capital's biggest customers, fell 9 per cent during the half-year period - that figure is now well into double digits.
Mr Bernard said: "The reason for the merger was scale. We are now much more able to withstand the cold blast of the advertising market." He said the merged company would plan its strategy over the summer, with emphasis on the future for its digital radio interests and how it will tackle the growing dominance of the BBC.
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