Inconsistent radio ad market sees sales fall 3% at GWR

by Sam Matthews,, Brand Republic 25-Jan-05, 11:00

LONDON – GWR Group, owner of Classic FM, has seen weak advertising sales during the quarter to December 31, down 3% year on year.

GWR said in a trading statement that October and November remained weak but total revenue for December grew 5%, strengthened by an 8% increase in national revenue.

GWR's flagship station Classic FM witnessed most of this growth, with national revenues up 10% compared with last December. However, the station's total revenue is down 7% for the quarter compared with a 12% growth for the same period in 2003.

The company described the radio advertising market as "inconsistent", and said that January revenues were forecast to be down by 4% compared with last year.

Separately, Capital Radio said that group revenue had fallen by 4% in the last quarter of 2004, reflecting what it described as the "challenging market conditions experienced by the radio industry". However, it said there were signs of improvement and it expects January revenues will be flat year on year.

Christmas sales of DAB radios have overtaken the 1.2m figure estimated by the Digital Radio Development Bureau. Detailed figures are expected to be released next month.

GWR has invested £5.5m over the past year in digital radio and said that it was generating strong advertising revenue from digital stations for the first time last year.

The group also revealed that the £711m merger with the Capital Radio Group should be completed by early May, subject to the sale of Century FM in the East Midlands going through -- one of the Office of Fair Trading's requirements for not referring the merger to the Competition Commission.

Shares in the company, listed on the London Stock Exchange, fell by 1% when the market opened this morning, down 2.6p to 249.37p.

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