News story about an announcement by UK commercial radio owner Milestone Group plc of a strategic review of its local radio operations, written by Grant Goddard in June 2005 for The Radio Magazine.

1. NEWS: MILESTONE GROUP PLC
ORDERS REVIEW OF LOSS-
MAKING LOCAL RADIO STATION
OPERATIONS
by
GRANT GODDARD
www.grantgoddard.co.uk
June 2005

2. News: Milestone Group plc Orders Review Of Loss-Making Local Radio Station Operations Page 2
©2005 Grant Goddard
The share price of Milestone Group plc, owner of four local commercial radio
stations, fell sharply following Monday’s announcement that it has
commissioned a review of its operations by a management consultancy. The
Milestone statement referred to the “challenging advertising marketplace” and
“the deterioration in its markets” as factors that will force it to consider options
such as “realising the value of assets of the group” or providing “greater scale”
to improve returns to shareholders. Having been unsuccessful with its local
radio licence applications in the Blackburn, Cornwall and Banbury markets, the
board is “reviewing its development strategy” but will “continue a policy of
pursuing appropriate opportunities for targeted new radio licences”. Radio
licence applications will be submitted for southern Oxfordshire and Andover,
both to be advertised by Ofcom next year.
Milestone’s accounts for the half-year to end-March 2005 show that all but one
of the group’s stations continue to make a loss. Oxford’s 'Passion FM' made a
£123,000 loss (compared to a £54,000 loss a year ago) on sales of £79,000
(down from £182,000); Newbury’s 'Kick FM' made a £47,000 loss (compared
to a £59,000 loss) on sales of £194,000 (down from £215,000); Basingstoke’s
'Kestrel FM' made a £383 loss (down from an £18,000 profit) on sales of
£279,000 (up from £276,000); and 'Rugby FM' made an £8,000 profit
(compared to a £23,000 loss) on sales of £236,000 (up from £217,000).
In February, Milestone raised £1.1m from a new issue of 5.5m shares in order
to fund “exciting opportunities” for new radio licence applications. Days before
publishing its latest accounts, Milestone publishing director Tom McGowran
resigned to “look at other opportunities”, following which a “major restructuring”
of the division has been announced. Publishing operations lost £264,000 in the
half-year, compared to a loss of £115,000 a year ago, and sales were down
18% year-on-year.
[First published in 'The Radio Magazine' as 'Milestone To Review Radio Operations', #690, 29 June 2005]
Grant Goddard is a media analyst / radio specialist / radio consultant with thirty years of
experience in the broadcasting industry, having held senior management and consultancy
roles within the commercial media sector in the United Kingdom, Europe and Asia. Details at
http://www.grantgoddard.co.uk