Pressure on SMG over late results

TROUBLED media group SMG is coming under increasing pressure to release its annual results - or face having its shares suspended. The Virgin Radio and Scottish TV owner ended its financial year on 31 December, but more than three months later it has yet to publish figures.

Under Stock Exchange rules, companies have 120 days to file accounts or their shares are suspended. The media group, which is £350m in debt, has been bogged down in talks with its bankers after breaching the terms of its loans at the end of last year.

The banks, led by Clydesdale and Barclays, know that under listing rules SMG must announce figures by April 30 and are thought to be using the deadline to squeeze the best deal from SMG on refinancing.

A spokesman for the Financial Services Authority said: 'There is a 120-day deadline for the announcement of preliminary results following a financial yearend. If companies go beyond that, we suspend their listing to protect investors.'

A month ago SMG said it had reached, in principle, a refinancing agreement with its bankers to fund it until June next year. The company said it expected the process to end 'shortly' and would announce preliminary results once a deal was finalised. Nothing has been heard since.

SMG, led by chief executive Andrew Flanagan, has used a study by consultant Deloitte & Touche to convince bankers of the underlying value of its assets. The group's bankers demanded that independent consultants were brought in late last year to assess SMG's true worth. Under its banking agreements, SMG's operating profits must comfortably exceed interest payments. But recession in the media sector last year is believed to have slashed profits so they are now little higher than the interest charges on its debt pile.

It is thought the Deloitte report had a particularly strong valuation on commercial station Virgin Radio, bought for £225m by SMG two years ago. One analyst said Deloitte would have needed to play up the potential of Virgin's digital frequencies, which allow it to carry additional services such as text advertising, to boost its value.

Shares in SMG, which hit a low of 94 1/2p last September, have moved ahead in recent weeks as the media sector climbed on hope of a brighter outlook for advertising and ended last week at 149 1/2p - valuing the company at £469m.