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Scottish Radio Profits Hit By National Advertising Dip

First half revenues at Scottish Radio Holdings (SRH) have been hit by the substantial downturn in national advertising, the group's interim financial results showed today. Total group revenues fell by 1%, with the effect felt most strongly at the company's outdoor division.

Earlier in the week SRH agreed to sell its outdoor business, Score Outdoor, to Clear Channel UK (CCUK) for a minimum of £33.5 million (see Score Outdoor Sale To Create Third Force In UK Market); SRH will now concentrate on its radio and press businesses.

Radio In analogue radio, local revenues grew by 5% on a like for like basis for the six months ended 31 March 2002. Local revenues accounted for 53% of total radio advertising during the period, up from 50% a year earlier. This strategy has enabled SRH to offset the very difficult conditions in the national advertising market, where revenues fell by 8% in H1.

Press In H1 advertising revenue at Score Press' UK titles grew by 6%, whilst circulation revenues rose by 7%. Turnover grew by 3% to £13.4 million.

Score now publishes 40 local weekly newspapers.

Outdoor The Score Outdoor division is Britain's fourth largest 48-sheet poster advertising business and is in line to be sold to CCUK for £33.5 million, once clearance is granted from the OFT.

The outdoor business was most heavily affected by the fall in national ad revenue, with operating revenues falling by 17% during the period.

Communications Bill Commenting on the Draft Communications Bill, SRH said that it held good news for the media sector as a whole and in particular for radio.

"The proposal to allow non-European Union ownership is positive, but we are doubtful that regulators in the USA will reciprocate. At the national level, the ownership proposals within radio are to be applauded but at the local level we believe that the Government will need to do more," the statement said.

Outlook SRH says it is well-positioned to weather the recent challenging climate for national advertising revenues.

"The difficulties of companies in the media sector dependent on national advertising have been well-publicised. It is encouraging that the group's strategic focus on local radio and newspaper sales has cushioned against the weakened national advertising spend in radio in particular while positioning it strongly for the national upturn when it comes."

Shares in Scottish Radio were down by 15p at 1,000p this morning following the release of the results.

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