Radio watchdog backs call for fewer ownership limits: Expanding GWR pins hopes on relaxation of restrictions

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THE RADIO Authority, which is responsible for regulating the UK's commercial radio industry, has backed the lifting of some restrictions on the ownership of commercial radio licences.

It is understood to want to retain the current points system - which limits any one group to 15 per cent of the market, calculated by reference to population coverage.

But it favours scrapping the limit of 20 licences that can be held. It also would like to get rid of the complex grading system under which different types of station have lighter or heavier weightings for the purpose of calculating the number of points they attract.

Supported by the Association of Independent Radio Contractors, it has made a submission along these lines to the Department of National Heritage, which is reviewing limitations on media ownership.

Ralph Bernard, chief executive of GWR, the Midlands radio group, said yesterday he was hopeful that the Government would decide to relax limitations. He said GWR's submission to the DNH had recommended that restrictions on cross-media ownership be limited to normal competition rules enforced by the Office of Fair Trading.

GWR, which has reached the maximum 20-licence limit, is pinning its hopes on a relaxation. Even the more limited change advocated by the Radio Authority would mean it could almost double its size.

GWR made pre-tax profits of pounds 930,000 ( pounds 317,000) in the six months ended 31 March on turnover of pounds 7.8m ( pounds 4.1m). Some of that was acquisition-driven; on a continuing business basis turnover rose to pounds 5.5m.

Earnings per share were 14.1p (6.8p) and the dividend is 5.5p (4p). The shares slipped 3p to 985p.

GWR, which has stations in the South-west and Midlands, and which recently bought Mid Anglia Radio, has a 17 per cent stake in Classic FM.

Mr Bernard said the classical music station's income was growing rapidly and had reached more than pounds 1m a month. As a result he expected the UK station to break even in the current year, although investment in licences in the Netherlands and Finland meant the company as a whole would probably still make a loss.