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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Local Radio | LSE:TLR | London | Ordinary Share | GB00B0108C60 | ORD 4P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 5.05 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:1917J Local Radio Company PLC (The) 05 December 2007 5 December 2007 THE LOCAL RADIO COMPANY PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2007 Highlights * Like for like revenue* in second half of the year up by 7% to #8.98million (H2 06 # 8.41m) * Full year adjusted operating profit of #153,000** (Yr to 30 Sept 06 loss of #1.8 million) * Audiences continue to grow across the Local Radio Company's 27 stations. * First Radio Sales generated record commission revenues of over #2 million. * Cost reduction programme reduced overheads by 5% * Local radio station website offering proving successful with listeners and advertisers. * Cash injection of #2.8 million complete * Significant opportunities for acquisitive growth *From continuing operations **Excluding depreciation, amortisation and impairment, provision for share based payments and exceptional items but including share of Joint Venture and sale of subsidiary undertakings. See reconciliation later in statement. Richard Wheatly, Executive Chairman of The Local Radio Company Plc, said: "This year has marked a significant change in performance across the Group as a result of actions taken to underpin our strategy in a changing landscape for radio in the UK. Audiences, sales commission and revenues are all up and costs are down which has resulted in our first full year operating profit. This excellent result gives us renewed confidence in the potential for the local radio market. "We are pleased that our revenue and bottom line performance for October and November are ahead of last year and December is tracking ahead. Whilst the outlook remains uncertain, we are confident and determined that the improvement in our performance will continue. "There are a number of opportunities in the UK local radio market for consolidation and the Company's resilient performance in the recent challenging market conditions has underlined our ability to integrate stations under the Local Radio Company's umbrella, enabling them to benefit from operating synergies. The Board is aware of a number of ongoing market developments and is committed to its strategy to grow revenues through acquisitions which demonstrate clear value." Enquiries Richard Wheatly/Alistair Mackenzie Tel: +44 (0) 1494 688205 The Local Radio Company Plc www.thelocalradiocompany.com John Craven/Simon Robinson Tel: +44 (0) 20 7426 9000 Landsbanki Securities (UK) Limited Michael Oke/Andy Mills Aura Financial Tel: +44 (0) 20 7321 0000 www.aura-financial.com OPERATIONAL AND FINANCIAL REVIEW 2007 2006 (Unaudited) #'000 #'000 Group turnover (inc. share of joint venture) 19,128 20,147 Gross profit margin 75% 70% Adjusted operating profit/(loss)** 153 (1,834) Net increase/(decrease) in cash 2,889 (1,549) **Excluding depreciation, amortisation and impairment, provision for share based payments and exceptional items but including share of Joint Venture and sale of subsidiary undertakings. See reconciliation later in statement. This year has marked a significant positive change in performance across the Group as a result of actions taken to underpin our strategy in a changing landscape for radio in the UK: * Revenues have increased during the second half on a like for like (from continuing operations) basis by 7% and the business became cash positive for the period May to September. * Our cost reduction programme reduced overheads by 5%. * Local station radio brands have been extended into a new local website offering which is proving successful with listeners and advertisers. * The First Radio Sales business has launched a web sales division. * A successful cash injection of #2.8 million has positioned the group to benefit from market opportunities. * First Radio Sales generated record commission revenues of over #2 million. * Audiences continue to grow across the Local Radio Company's stations. Audiences, sales commission and revenues are all up and costs are down which has resulted in an adjusted operating profit and renewed confidence in the outlook for the Company. Market improvement The much noted market decline in advertising revenues that had continued during the first half of the year have relented and revenues for the UK radio industry were up by 3% for the second half. Throughout the period the Local Radio Company has outperformed the rest of the radio sector and we believe that the unique appeal of local radio brands, as opposed to our regional and national brand peers, has enabled the Company to track a more robust course in tough markets. Revenue increase Revenue at five of our radio stations exceeded #1 million and six others achieved between #750,000 and #1 million. One of our larger stations, Sun FM, achieved its best ever performance with #1.2 million in revenue and one of our newer stations, Durham FM, achieved sales of #628,000 in its first full year. In June 2007 we launched Northallerton FM, a small station which joins our North East and Yorkshire clusters. Audience growth The strong run of audience growth continues across our stations and RAJAR results for Quarter 3 2007 confirm that we now reach a total audience of 920,000 weekly listeners who listen for 7.5 million hours across our 27 stations. A year ago the Company had 900,000 weekly listeners listening for 7 million hours. Cost reduction We have continued with the programme to reduce our cost base and develop the business for the future. On 31 October 2006 the Company sold the entire share capital of Merseyside's The Rocket Limited for #100,000, #40,000 of which was deferred. We also discontinued our loss making Enterprises operation at the end of the last financial year. Our total overheads, excluding provision for share based payments, fell by #727,000 against the previous year, a reduction of 5%. New Revenue Streams Given the strong loyalty of local radio audiences we are benefiting from technological developments and the many options now available to audiences to listen to our medium. We have made solid progress during the period in leveraging the Company's 920,000 listener base. We have made a significant investment in our online strategy, extending our strong local brands and have started to generate new, non-traditional, revenue streams. In the second half new websites have been launched across the Group, encouraging interactivity, with online streaming of our radio stations and providing opportunities for our advertisers to market their products or services across both platforms through the Company's Microsite Development Offering for advertisers. This approach marries online and radio advertising and reflects growing listenership via the websites across each of our 27 stations. Many of the Company's advertisers are local enterprises without the scale to develop their own online marketing platform. During the period we completed a transaction which has created another exciting new model for the business by linking two dynamic media platforms. At the end of the financial year we entered into a commercial arrangement with Portsmouth Football Club (PFC). The Company transferred the entire issued share capital of The Quay, Isle of Wight Radio and Spirit FM to a new company, Quadrant Media Limited, and PFC purchased a 26% stake for #1 million. PFC will have the right to increase their shareholding to 50% during the period to 28 Sept 2008 on the payment of a further cash sum of #950,000. First Radio Sales The Company has a 50% shareholding in First Radio Sales Limited which sells airtime for 134 local radio stations across the UK to national media buying agencies and their clients. This is an extremely successful business that has grown since its formation and this year generated record commission revenues of over #2 million. First Radio Sales has launched a new digital sales operation, FRSD, which offers advertisers the opportunity to buy space on many of the websites of the 134 radio stations in its portfolio. Corporate developments In November 2006 the Company raised #2.8 million net of expenses and welcomed Hallwood Investments Limited on to the share register and Tony Gumbiner and Rhys Davies onto the Board. I would like to thank Graham Parrott, who stood down from Board in May, for his support and guidance. As outlined in a recent EGM circular it is the Board's view that the current market valuation of The Local Radio Company represents a significant discount to the value at which other radio assets have been recently acquired. In October 2007 shareholders authorised the Board to purchase in the market up to 14.99% of the issued Ordinary Shares of the Company. This will have the effect of reducing the Company's equity base thereby increasing cash flow and asset value on a per share basis. The High Court has subsequently authorised the company to reduce its share premium account, creating distributable reserves that will be used for the share purchase. Future of Radio On 22 November 2007, OFCOM published the document: The Future of Radio; the next phase. This statement and consultation had three main themes- localness, ownership rules and digital - and was broadly positive for The Local Radio Company. We are pleased that OFCOM's statement validates our view of the importance of localness to commercial radio audiences and the acknowledgement by OFCOM that local radio is the default medium for delivering key local information. We also welcome OFCOM's approach on co-location. Most of our stations are below the 250,000 adult listener threshold proposed for co-location giving us the opportunity to realise additional operational synergies in future. We also welcome the proposed simplification of ownership rules. However, while simplification will allow further consolidation, we do not to expect to see any significant changes in the short term as primary legislation is required to introduce the proposed reforms. On the third theme of digital, a working group is being set up by OFCOM and the Department of Culture, Media and Sport to assess the conditions needed for digital platforms to become the predominant means of delivering radio in the UK. While we have no sunk investments in digital radio, we intend to play a central role in shaping this process in order to reduce the considerable uncertainty about the timing, technologies and implementation of any future digital switchover. Market opportunities There are a number of opportunities in the UK local radio market for consolidation and the Company's resilient performance in the recent challenging market conditions has underlined our ability to integrate stations under the Local Radio Company's umbrella, enabling them to benefit from operating synergies. In particular, the economies of scale associated with the local radio sector can radically improve efficiencies within many back office functions and we believe that some independent stations would benefit from exploiting these advantages. In addition, their local advertisers could benefit from our integrated marketing approach. The Board is aware of a number of ongoing market developments and is committed to its strategy to grow revenues through acquisitions which demonstrate clear value. Financial Review Group turnover Total Group turnover was #19.13 million for the year, a 5% decrease against 2006. However, discontinued operations contributed #1.46 million to turnover in 2006; and taking this into consideration Group turnover from continuing operations actually increased by #0.44 million, an increase of 2.2%. Gross profit Gross profit for the year increased to #13.58 million, a 2% increase year on year, and the gross profit margin increased to 75%. Group operating profit/(loss) The Group's reported operating loss for 2007 was #10.1 million, after goodwill impairment of #8.5 million (2006: #18.5 million). We have continued to apply strict criteria to our valuations, which are based on discounted future cash flows on a station by station basis rather than being by reference to the market values, which reflect more closely turnover multiples which relate to licence holding. UK GAAP does not reflect the licence values in balance sheets. This is an area which we will review for IFRS adoption purposes. Our overall performance has improved significantly; The result before interest, tax, depreciation, amortisation and impairment, provision for share based payments and exceptional items but including share of Joint Venture and sales of subsidiary undertakings for this financial year is a profit of #0.15 million compared to a loss of #1.81 million in the last financial year. 2007 2006 (Unaudited) (As restated) #000 #000 Group operating loss (10,101) (21,084) Share of operating profit in JV 282 277 Profit/(loss) on sale of sub 795 (280) _______ _______ Loss before interest (9,024) (21,087) Depreciation 555 617 Amortisation and Impairment 8,524 18,512 Provision for share based payments 98 35 Exceptional items - 89 ______ _______ Adjusted operating profit/(loss) 153 (1,834) Cash There was a net cash increase of #2.89 million during the year. This was as a result of the cash raised through the share placing in November 2006 and also the more recent arrangement with Portsmouth Football Club. The Group has substantial cash balances and expects to generate cash during the new financial year. As outlined in this report the Company will consider utilising some of this cash to make market purchases of its own shares if the Board determines that this will be in the best interests of shareholders. Strategy and Future Outlook In addition to pursuing an acquisition strategy in local radio the Board will continue with its successful strategy of developing the business through organic growth, improving our operational performance, optimising our portfolio of radio station assets and developing new revenue streams through the online extension of our local brands. We are pleased that our revenue and bottom line performance for October and November are ahead of last year. Whilst the outlook remains uncertain, we are confident and determined that the improvement in our performance will continue. Finally, the Board would like to extend a sincere thank you to all our talented, creative and dedicated staff who have worked hard to enable the Company to make excellent progress. Unaudited consolidated profit and loss account for the year ended 30 September 2007 2007 2006 As restated (see note 1) Continuing Discontinued Total Continuing Discontinued Total #000 #000 #000 #000 #000 #000 TURNOVER: Group and share of joint ventures 19,108 20 19,128 18,686 1,461 20,147 Less: share of joint ventures turnover (1,062) - (1,062) (1,044) - (1,044) ________ ________ ________ ________ ________ ________ GROUP TURNOVER 18,046 20 18,066 17,642 1,461 19,103 Cost of sales (4,480) (1) (4,481) (4,486) (1,274) (5,760) ________ ________ ________ ________ ________ ________ GROSS PROFIT 13,566 19 13,585 13,156 187 13,343 ________________________________________________________________________________________________________ Administrative expenses excluding amortisation and exceptional items (15,150) (12) (15,162) (14,941) (885) (15,826) Amortisation and exceptional items (8,524) - (8,524) (17,964) (637) (18,601) ________________________________________________________________________________________________________ Administrative expenses (23,674) (12) (23,686) (32,905) (1,522) (34,427) ________ ________ ________ ________ ________ ________ GROUP OPERATING LOSS (10,108) 7 (10,101) (19,749) (1,335) (21,084) Share of operating profit in Joint Venture 282 277 Profit/(Loss) on sale of subsidiary undertaking 795 (280) ________ ________ LOSS BEFORE INTEREST (9,024) (21,087) Interest receivable - Group 62 20 - Joint Venture 18 11 Interest payable (9) (31) ________ ________ LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (8,953) (21,087) Tax on loss on ordinary activities - - ________ ________ LOSS ON ORDINARY ACTIVITIES AFTER TAXATION (8,953) (21,087) Minority interests 39 37 ________ ________ RETAINED LOSS FOR THE PERIOD (8,914) (21,050) ________ ________ Loss per share in pence Basic and diluted (12.85)p (37.55)p ________ ________ Unaudited consolidated balance sheet as at 30 September 2007 At 30 September 2007 At 30 September 2006 As restated (see note 1) FIXED ASSETS #000 #000 #000 #000 Intangible assets 10,457 19,086 Tangible assets 1,713 1,817 Investment in joint venture - share of gross assets 2,818 2,802 - share of gross liabilities (250) (134) 2,568 2,668 Other fixed asset investments 278 221 Total investments 2,846 2,889 ________ ________ 15,016 23,792 CURRENT ASSETS Debtors 3,151 3,314 Cash at bank and in hand 2,479 - ________ ________ 5,630 3,314 CREDITORS: Amounts falling due within one year (3,779) (4,189) ________ ________ NET CURRENT ASSETS/(LIABILITIES) 1,851 (875) ________ ________ TOTAL ASSETS LESS CURRENT LIABILITIES 16,867 22,917 CREDITORS: Amounts falling due after more than one year - (30) ________ ________ NET ASSETS 16,867 22,887 ________ ________ CAPITAL AND RESERVES Called up share capital 2,880 2,248 Share premium account 47,676 45,501 Other reserves 450 352 Profit and loss account (34,152) (25,238) ________ ________ SHAREHOLDERS' FUNDS 16,854 22,863 Minority interests 13 24 ________ ________ 16,867 22,887 ________ ________ Unaudited consolidated cash flow statement for the year ended 30 September 2007 Year ended Year ended 30 September 2007 30 September 2006 (As restated) #000 #000 #000 #000 NET CASH (OUTFLOW) FROM OPERATING ACTIVITIES (882) (1,193) RETURNS ON INVESTMENTS AND SERVICING OF FINANCE Capital redistribution 250 Share of operating profit in joint venture 150 Interest and other investment income received 62 20 Interest paid (8) (30) Interest element of finance lease rentals (1) (1) ________ ________ NET CASH INFLOW /(OUTFLOW) FROM RETURNS ON INVESTMENTS AND SERVICING OF FINANCE 453 (11) CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT Purchase of tangible fixed assets (474) (597) Purchase of unlisted investments (57) (123) Sale of tangible fixed assets - 23 ________ ________ NET CASH OUTFLOW FROM CAPITAL EXPENDITURE (531) (697) ACQUISITIONS AND DISPOSALS Purchase of subsidiary undertakings - (5) Disposal of subsidiary undertaking 60 400 Sale of shares in subsidiary undertaking 1,000 - ________ ________ NET CASH INFLOW FROM ACQUISITIONS AND DISPOSALS 1,060 395 ________ ________ CASH INFLOW/(OUTFLOW) BEFORE FINANCING FINANCING 100 (1,506) Issue of ordinary share capital 3,002 - Issue Costs (195) - Repayment of loans (18) (43) ________ ________ NET CASH INFLOW/(OUTFLOW) FROM FINANCING 2,789 (43) ________ ________ INCREASE/(DECREASE) IN CASH 2,889 (1,549) ________ ________ 1. Basis of preparation The preliminary announcement covers the year to 30 September 2007. The financial information contained herein does not constitute full accounts within the meaning of section 240 Companies Act 1985. Statutory accounts for the year ended 30 September 2006 have been delivered to the Registrar of Companies, and those for the year ended 30 September 2007 will be so delivered following the Company's annual general meeting. The auditors have reported on the accounts for the year ended 309 September 2006: their report was unqualified and did not contain a statement under the Companies Act 1985 s237(2) or (3). Copies of the financial statements for the year ended 30 September 2007 will be sent to all shareholders and delivered to the Registrar of Companies in due course. The accounting policies adopted in this preliminary announcement are consistent with those adopted in the Company's financial statements. The prior year figures have been restated to reflect the adoption of FRS 20 (Share based payment) leading to prior period charges and charges in the current year as follows: 2007 2006 (Unaudited) #000 #000 Charge for the period 98 35 Prior period adjustment 30 2. Loss on ordinary activities before taxation The adjusted profit/loss before interest, tax, depreciation, amortisation and impairment, provision for share based payments and exceptional items for the year was #153,000 (2006 - loss #1,834,000). This includes a profit on sale of subsidiary of #795,000. The loss on ordinary activities before taxation was #8,953,000 (2006 - #21,087,000). The loss after taxation and minority interests was #8,914,000 (2006 - #21,050,000). The directors do not recommend the payment of a dividend (2006 - nil). 3. Tax on loss on ordinary activities There is no tax payable due to losses during the year, 4. Loss per share 2007 2006 (Unaudited) (As restated) Total Total Loss for the year (#000) (8,914) (21,050) Weighted average number of shares (Basic) 69,361,040 56,052,142 Basic loss per share (12.85)p (37.55)p Basic and diluted loss per share are the same, as the effect of all potential ordinary shares is not dilutive. 5. Unaudited reconciliation of movements in shareholders' funds Group Group Company Company 2007 2006 2007 2006 (As restated) (As restated) #000 #000 #000 #000 Loss for the period (8,914) (21,050) (8,925) (24,161) Reserve arising on provision for share based payments 98 35 98 35 Issues of ordinary shares 632 16 632 16 Reserve arising on issue of ordinary shares 2,175 154 2,175 154 Deferred consideration to be settled by the issue of ordinary shares - (225) - (225) _______ _______ _______ _______ Net (reduction)/increase in shareholders' funds (6,009) (21,070) (6,020) (24,181) Opening shareholders' funds 22,863 43,933 22,887 47,068 _______ _______ _______ _______ Closing shareholders' funds 16,854 22,863 16,867 22,887 _______ _______ _______ _______ 6. Unaudited analysis of net (debt)/ funds At At 1 October 2006 Other 30 September (As restated) Cash flow movements 2007 #000 #000 #000 #000 Cash at bank and in hand/ bank overdrafts (410) 2,889 - 2,479 Debt due after one year (9) - 9 - Debt due within one year (19) 8 - (11) Finance leases (2) 1 - (1) _______ _______ _______ _______ (440) 2,898 9 2,467 _______ _______ _______ _______ 7. Post balance sheet events On 2 October 2007 the Company held an EGM at which three resolutions were considered and approved. These were: - to approve the Rule 9 waiver granted by the Panel on Takeovers and Mergers - to authorise the Company to make market purchases of its own shares and - to approve the cancellation of the share premium account. A copy of the circular outlining the details of the EGM is available from the Company Secretary at the registered office or on line at http:// www.thelocalradiocompany.com/ The High Court subsequently approved the cancellation of the share premium account on 24th October 2007. The Board will now consider the acquisition of its own shares as outlined in the shareholder circular up to the maximum aggregate number of Ordinary Shares authorised to be purchased of 10,793,038 (representing approximately 14.99% of the Company's issued share capital). This information is provided by RNS The company news service from the London Stock Exchange END FR UUGMAPUPMGBC
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