SMG profits rise 20% despite downturn at Virgin Radio

by Jennifer Whitehead,, Brand Republic 09-Sep-04, 11:00

LONDON - SMG has seen pre-tax profit rise by 20% over the first six months of the year to £5.5m, with turnover up by 3% to £88.5m, despite difficulties at Virgin Radio.

The figures, which exclude the publishing business sold by SMG in April 2003 and its stake in Scottish Radio Holdings, sold in January this year, showed that the company's move to focus on its core businesses, including the Scottish and Grampian ITV licences, was paying off.

It said that the first six months of the year had been encouraging and that the advertising upturn was showing signs of sustainability.

For television, SMG said that regional airtime sales rose by 29%, as indigenous Scottish advertisers returned to television to take advantage of what it called "micro regions" to allow them to target Scotland-only audiences.

Overall, SMG's television business saw operating profit rise by 35% to £8.4m, while turnover rose by 8% to £58.1m.

Virgin Radio did not perform as well, with a weaker second quarter seeing profits drop by £500,000 to £2.5m, with turnover down by 13.6% to £10.2m.

SMG was critical of the Rajar measurement system, which showed a marked decline in Virgin Radio's listening hours. It said it had been working with Rajar to get rid of what it described as "weaknesses".

Andrew Flanagan, chief executive of SMG, said: "We have continued to strengthen the balance sheet, reduced our debt and prepared the group for a return to growth. With securely positioned businesses and the advertising upturn continuing, SMG is in a strong position within UK media."

SMG said that it expected the £31m sale of its share of GMTV to be completed shortly.

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