'News: UK Commercial Radio Share Prices Hit Record Lows Following "Weakening Outlook" from EMAP plc' by Grant Goddard
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News story about share prices of UK commercial radio companies hitting record lows, following a statement by EMAP plc predicting a "weakening outlook" for commercial radio revenues, written by Grant Goddard in July 2006 for The Radio Magazine.
![News: UK Commercial Radio Share Prices Hit Record Lows Following "Weakening Outlook" From EMAP plc page 2
©2006 Grant Goddard
Share prices of UK commercial radio groups hit record lows last week,
following EMAP plc’s announcement that “technology driven structural change
and difficult trading conditions” had created a “period of change” and “volatility”
in many of its markets.
Although circulation of its men’s magazines has slumped, outgoing EMAP
chairman Adam Broadbent said “in radio advertising, we have [also] seen a
good start to the year, followed by a weakening outlook. Over the full year, we
expect to continue to outperform the UK radio market due to our strong local
brands and national reach.”
Deputy chairman Alun Cathcart was elected EMAP’s new chairman at the
company’s Annual General Meeting.
One of EMAP’s largest shareholders said: “It is not a huge surprise they have
under-performed. There is a lot of venture capital money around in the media
sector. They wouldn't have much of a defence if someone came along with a
bid.”
Another investor said: “[Chief executive Tom] Moloney's job is under severe
pressure. He's had three strikes now. It is a cumulative thing.”
The City believes that the EMAP business could be broken up, rather than put
up for sale as a whole. Keith Bowman, analyst at Hargreaves Lansdown,
commented: "Just as investors had breathed a sigh of relief following the sale
of the troubled French magazine division, it now looks as though the UK
magazine unit is finding trading more challenging. Combine this with a weaker
outlook for EMAP's other major business, radio, and the shares look extremely
vulnerable to full-year profit downgrades.”
EMAP’s share price ended last week 14% down on the previous week at
723.5p, after hitting a new 52-week low. Scottish Media Group plc’s shares
also hit a new 52-week low and ended the week 7% down at 76p. New all-time
lows were recorded by GCap Media plc and Chrysalis plc (both down 2%
week-on-week) and The Local Radio Company plc (down 4%). GCap’s share
price fell as low as 217p at one point, moving it close to the £2 watershed price
that some analysts believe could herald an acquisition move.
[First published in 'The Radio Magazine' as 'Bad News Knocks Radio Shares', #745, 19 July 2006]
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](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)
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'News: UK Commercial Radio Share Prices Hit Record Lows Following "Weakening Outlook" from EMAP plc' by Grant Goddard
- 1. NEWS: UK COMMERCIAL RADIO SHARE PRICES HIT RECORD LOWS FOLLOWING "WEAKENING OUTLOOK" FROM EMAP PLC by GRANT GODDARD www.grantgoddard.co.uk July 2006
- 2. News: UK Commercial Radio Share Prices Hit Record Lows Following "Weakening Outlook" From EMAP plc page 2 ©2006 Grant Goddard Share prices of UK commercial radio groups hit record lows last week, following EMAP plc’s announcement that “technology driven structural change and difficult trading conditions” had created a “period of change” and “volatility” in many of its markets. Although circulation of its men’s magazines has slumped, outgoing EMAP chairman Adam Broadbent said “in radio advertising, we have [also] seen a good start to the year, followed by a weakening outlook. Over the full year, we expect to continue to outperform the UK radio market due to our strong local brands and national reach.” Deputy chairman Alun Cathcart was elected EMAP’s new chairman at the company’s Annual General Meeting. One of EMAP’s largest shareholders said: “It is not a huge surprise they have under-performed. There is a lot of venture capital money around in the media sector. They wouldn't have much of a defence if someone came along with a bid.” Another investor said: “[Chief executive Tom] Moloney's job is under severe pressure. He's had three strikes now. It is a cumulative thing.” The City believes that the EMAP business could be broken up, rather than put up for sale as a whole. Keith Bowman, analyst at Hargreaves Lansdown, commented: "Just as investors had breathed a sigh of relief following the sale of the troubled French magazine division, it now looks as though the UK magazine unit is finding trading more challenging. Combine this with a weaker outlook for EMAP's other major business, radio, and the shares look extremely vulnerable to full-year profit downgrades.” EMAP’s share price ended last week 14% down on the previous week at 723.5p, after hitting a new 52-week low. Scottish Media Group plc’s shares also hit a new 52-week low and ended the week 7% down at 76p. New all-time lows were recorded by GCap Media plc and Chrysalis plc (both down 2% week-on-week) and The Local Radio Company plc (down 4%). GCap’s share price fell as low as 217p at one point, moving it close to the £2 watershed price that some analysts believe could herald an acquisition move. [First published in 'The Radio Magazine' as 'Bad News Knocks Radio Shares', #745, 19 July 2006] 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