Advertising fall hits Chrysalis profits

CHRYSALIS, owner of London's leading commercial radio station Heart 106.2 FM, has been hit by the savage downturn in advertising revenues. It saw a sharp downturn in its first-half profits and warned of lower revenues for the full year.

As the newly merged Capital and GWR's shares began trading today as GCap Media, Chrysalis said its revenues in March and April showed a like-for-like fall of 12.5%.

That is not a straight comparison with Capital and GWR, which yesterday said that for April alone revenues were down 21% and 15% respectively.

Like its rivals, Chrysalis said the early Easter and the General Election had compounded the volatility it was already seeing in the advertising market.

Chief executive Richard Huntingford said he expected full-year revenues for the 12 months to the end of August would now be down by between 5% and 6%. He said first-half results had been affected by the impact of previous, lower-than-expected audience figures in the radio division and difficult, first-half trading conditions at the books division.

He added that yesterday's £29.5m purchase of Century in the East Midlands from GCap 'demonstrates our commitment to build on the unique and market-leading positions we have created in both Chrysalis radio and Chrysalis music'.

First-half operating profits dropped from £3.7m to £1.7m with pre-tax profits down from £2.2m to £300,000. Revenues were 5% lower at £78.4m. There is no interim dividend.

Huntingford said consolidation of the UK radio industry should continue to offer good opportunities for Chrysalis but he would not overpay. The group recently held discussions to merge with Guardian Media Group's radio interest, including Jazz FM.