Scottish Media Group (SMG), home of Virgin Radio, exceeded market expectations in the first half but warned the behaviour of the advertising markets was “short term and erratic”.
The Glasgow-based group said pre-tax profit, before exceptional, climbed 68 per cent to £6.7m in the six months to 30 June on sales of £94.9m. The performance was flattered by the £4.5m reduction in licence-fee payments this year.
SMG, which owns the ITV franchises Grampian and Scottish TV, said its market share of the peak-time TV audience was 30 per cent. The figure, an important barometer for advertisers, is one percentage point ahead of the ITV Network and seven percentage points ahead of BBC1. SMG said advertising revenues outperformed ITV as a whole over the period.
Chief executive Andrew Flanagan said: “There is no question that there is a tough (advertising) market out there but I think the strength of our market position allows us to hold up slightly better than our competitors.”
Flanagan said Virgin Radio had gained momentum, with turnover up four per cent to £10.6m against a backdrop of a three per cent slide for the radio market as a whole. Operating profit increased by 13 per cent to £2.6m. It has signed top DJ Christian O’Connell to present its breakfast slot from 2006 and is keen to grow its digital output.
“Digital radio is a big thing for us and allows us to launch new radio stations such as Virgin Radio Classic Rock,” said Flanagan. After being the first radio station to market “podcasting”, Virgin is looking to capitalise on it. The technology lets listeners download radio shows on to their MP3 music players.