Drop in adverts hits SRH revenues

Scottish Radio Holdings (SRH), which owns radio stations such as Today FM and FM 104, has described current trading in the radio sector as "lacklustre" with revenues down by 7 per cent in April.

However, the company said its Irish assets continued to perform strongly and trading was looking more optimistic in May. The company, which has been the subject of persistent takeover rumours, said despite the poor trading figures for April, it remained confident of a strong performance overall this year.

The company updated the markets on its current trading position after presenting its results for the half-year to March 31st.

These showed turnover rising 10 per cent to almost £52 million (€75.5 million), while group operating profit was up 20 per cent to £13 million. The company, which has been on a major buying spree in Ireland in recent years, managed to reduce its debt to €41.7 million, representing gearing of 31 per cent.

The company owns the following radio assets in the Republic: FM 104 and Today FM. It owns the following newspapers: the Kilkenny People, the Leitrim Observer, the Tipperary Star, and the Nationalist and Munster Advertiser.

Other major UK radio groups have also reported softening revenues in recent weeks, including Chrysalis. This is mainly due to marketers cutting back on their advertising budgets, although SRH was sheltered somewhat by its reliance on local advertising, which has been less volatile.

"It was a very marginal decline in local advertising, we've had the main fall come from the national advertising market. The retail business has been under some pressure and we can't hide from that, but by and large we've held up pretty well," chief executive David Goode said yesterday.

"Looking ahead, and it's purely estimates at this stage, it looks like May and June will not be as poor as April," he said. "We have to wait and see how the retail business goes to see if this is a blip but certainly from our perspective, April seems to be the floor."

The company's newspaper advertising and circulation revenues, which rely almost completely on local advertising, were up 8 per cent in April. SRH, in which UK media group Emap owns a 27.8 per cent stake, increased the interim dividend by 7 per cent to 7.5 pence per share.

Mr Goode declined to comment on reports that Emap had approached the company with an informal buyout offer, saying nothing had changed since Emap announced last month that it was interested in buying the remainder of SRH. - (Additional reporting Guardian service)