Ads gloom for the long run at GCap

BRITAIN's largest commercial radio group, GCap Media, has warned that weak consumer demand continues to hit spending by key advertisers.

It said today that advertising revenue in June and July is likely to be down on last year. In May, when Capital Radio and GWR completed their merger, chief executive David Mansfield partly blamed an early Easter and the general election for a 17% slide in ad revenue in April.

Today, he said May had shown a 14% decline year-onyear and added that 'difficult market conditions look set to continue into June and July'.

He also said that visibility - how much forward booking has been received - remains 'limited and the board continues to take a cautious view on market conditions for the foreseeable future'.

GCap revealed what it would have made if the group had been merged for the year to March. Proforma revenue was £245m with headline profits of £39m.

The final set of results from Classic FM owner GWR showed operating profits dipped from £21.2m to £20.4m on revenue 1% higher at £126m in the year to March.

GWR's pre-tax profits were £16.7m, £300,000 more than forecast at the time of the merger. Its costs on the deal were £4.1m, including £3.3m paid to City advisers.

GCap won a new radio licence for Xfm in Manchester this month and said it will begin broadcasting early next year. It is hoping to make Xfm the major challenger to the BBC's Radio 1.