The UK's biggest commercial radio broadcaster has revealed revenues were likely to be 14 per cent lower in July as it continued to reel from a poor advertising market.
GCap Media - which owns Birmingham station BRMB - believed lower spending around the World Cup may have been a factor for the heavy sales fall, but it also conceded that recent trading had been weaker than expected, with "visibility" for the business still limited.
Shares closed down 16p at 197.5p as analysts yesterday expressed disappointment at the latest trading figures from the company, which has 57 analogue and 100 digital stations including Capital Radio, Classic FM and Xfm.
Alex DeGroote, of Panmure Gordon stockbrokers, said his previous assumption for a two per cent deterioration in like-for-like revenues in the current financial year now looked "far too optimistic".
He has pencilled in a seven per cent fall as a best case scenario.
Two months ago, GCap Media - formed from the merger of GWR and Capital Radio in May of last year - said pre-tax profits fell four per cent to £22.2 million in the 12 months to March 31 after advertising revenues fell.
GCap, headed by chief executive Ralph Bernard, said part of the expected 14 per cent decline for July reflected changes to the advertising policy at Capital as the station sought to win back listeners by limiting commercial breaks to just two adverts.
The Birmingham Post understands the same "adlite" principle may be considered for BRMB if the shake-up at Capital is deemed a success. GCap said, excluding Capital, total revenues are likely to be eight per cent lower. Revenues for the quarter to June 30 declined by six per cent year-on-year, with the drop when stripping out Capital down by three per cent.
In a statement prior to the annual meeting, GCap said it was confident it had addressed the internal factors affecting revenues.
It also believed it was taking the right steps to make Capital more attractive to listeners, including through improved presentation. It added: "Recent trading has been weaker than we expected. Visibility remains limited and the GCap board takes a cautious view on market conditions in the near term. However, against the backdrop of a difficult advertising market we remain committed to our strategy which we believe will deliver long term value for the business."
The company is the latest media company to report a worsening advertising market, with ITV, Emap and others reporting difficulties.