Advertising slump caution for GWR

CLASSIC FM-owner GWR today reinforced its competitors' view that radio advertising revenue has weakened sharply in the past two months.

GWR, in the throes of a £700m, nil-premium merger with Capital Radio, said today group ad revenue fell 8.7% in October and looks like being 6.6% lower in November.

The fall has been almost entirely sustained in national ad campaigns, mainly for consumer goods.

Chairman Ralph Bernard said he expected the Office of Fair Trading to complete its investigation into the merger and announce whether or not there will be a Competition Commission probe 'in the course of the next few weeks'.

Rounding on critics of the deal who have called for a full inquiry which could delay the merger at least another six months, Bernard said: 'Over the last four years, the BBC has, without recourse to an external or independent regulator, successfully repositioned itself to appeal to commercial audiences.

'This has had a significant impact on all commercial radio operators.

'Our merger will lead to more investment in talent and services and finally offer sustained competition to the BBC.'

GWR's total revenue rose 3% in the six months to the end of September, with headline underlying pre-tax profits up 12% at £6.9m.

Classic FM's revenue rose 6.4% in the half while the local radio group's were up by 1.2%.

Earnings grew 18% to 3.3p per share and the interim dividend is tweaked 4% higher to 2.4p.