Newly formed GCap says radio conditions difficult

GCap Media, the UK radio company created by the merger of Capital Radio and GWR, marked its first day of trading yesterday by warning of a sharp decline in April revenues with no improvement in sight.

The company, which controls roughly 40 per cent of the UK radio advertising market, said April revenues declined 17 per cent due to weak consumer confidence and low advertiser spending.

Capital Radio revenues were down 21 per cent and GWR revenues were down 15 per cent. The company said the UK election and the timing of Easter also had a negative impact.

"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," the company said.

The combined company's shares, trading under the Capital Radio stock symbol until today, fell 8.5 per cent to 320 pence by 0749 GMT.

The company posted Capital Radio's results for the six months to March 31, which showed revenues down one per cent to £59 million, and underlying profit before tax falling to £10.8 million from £12.1 million the prior year.

GCap also announced the sale of 106 Century FM in the East Midlands to Chrysalis Group for £29.5 million. The asset sale was required by UK competition regulators as a condition of approval for the merger.