Chrysalis hit by £9.6m write-off

The share price of Chrysalis, the media group which owns Heart FM, plunged 13 per cent yesterday after it announced plans for a £9.6m write-off of its internet investments.

That would wipe out any earnings the group might have been expected to make. Prior to the write-off, estimates of Chrysalis pre-tax earnings for the year to 31 August had ranged from £9.6m to a loss of about £5m.

Chrysalis stock closed at a 12-month low of 175p, down 25p. Rival GWR slid 29p to 201p, while Capital Radio fell 65p to 550p.

The company also said it was searching for partners to help develop Rivals, a sports website, and that no further cash would be devoted to online investments.

Simon Lapthorne, analyst with Old Mutual Securities, said: "I don't think anybody had attached any value to the new media portfolio, including Rivals. They have to be seen to be hard nosed and not to pour good money after bad if things are not working."

On a brighter note, the company said radio revenues for the recently concluded fiscal year would be up 17 per cent to £43.4m. Audience levels improved 13 per cent.

Phil Riley, the chief executive of Chrysalis Radio, said: "This compares very favourably with the industry as a whole, which is expected to show flat growth across the period."