Advertisers back says radio group

Shares in GWR, the radio group that owns Classic FM, rose more than 3% today after it revealed a near doubling in profits last year.

The company, which also operates 33 local radio stations across the company, reported pre-tax profits of £17.1m, up 99% on last year‘s figure.

Shares in the company climbed 8.25p to 253.25p on the news, making it one of the biggest gainers on the London Stock Exchange.

Executive chairman Ralph Bernard said that structural changes and business improvements made during the advertising downturn were paying off as the market recovered.

Advertisers are returning to the airwaves, he added.

GWR said that it was continuing to focus on building up its digital radio business, with some 20% of its operating profits now being invested in that area.

At Classic FM, which makes up about one-fifth of GWR's total revenues, advertising revenues recovered during the second half of the year as large retail, motor and financial sector advertisers returned to the airwaves. The station's ad revenues were up 16% in the second half, and up 2.3% for the full year.

GWR said April UK advertising revenues were up 10.5%, and that it expected ad revenues in May to rise by about 2.5%.

Full-year turnover from continuing operations, which excludes the overseas assets sold by the company, rose 8.8% to £125.6m.

GWR's net profit of £8.5m compared with a loss of £15.1m the year before.

Shareholders are to get a 6.3p dividend payout, up 8.6%.

Analysts described the results as a ?shot in the arm‘ for the company. The strong increase in profit was in line with City expectations after a refocusing programme at GWR.

Dresdner Kleinwort Wasserstein said the company had had a ?very productive 12 months‘ and was now much leaner and more focused.

City brokers are expecting profit to rise again in the current financial year, with profit set to jump to £20.5m – this assumes 5% growth in analogue radio turnover.