Chairman's Statement

SMG PLC
6 April 2001

SMG plc

Company No. 203873

The following statement was made by Don Cruickshank, Chairman of SMG plc, at
the Company's Annual General Meeting held at 200 Renfield Street, Glasgow at
12 noon on Friday 6 April 2001.


2001 ANNUAL GENERAL MEETING

CHAIRMAN'S STATEMENT

For SMG, 2001 presents both opportunities and challenges, as we navigate our
way through what are currently unpredictable and contrasting operating
conditions.

The Communications White Paper published in December 2000 gave an early
indication of the Government's thinking on cross media ownership and confirmed
the view that an overhaul of the current system of regulation is long overdue.
For SMG, as a leader and proponent of an integrated media approach, we have
argued for a radical and liberal approach to cross media ownership. We believe
that it is essential for the Government to relax the existing cross media
ownership regulations if its aim of creating British champions in the global
world of media and communications is to be achieved. It is our view that in
the Radio sector in particular, consolidation is inevitable and to that end we
have now built up our shareholding in Scottish Radio Holdings plc to just over
29%.

Also since the start of the year, we have renewed both the Scottish Television
and Grampian Television licences for a further 10 years starting from 1 April.
These are valuable franchises and their renewal provides stability and
certainty for a substantial period. The financial terms were higher than
anticipated, but for a group of our size these cost increases can be absorbed
and, going forward, these payments will reduce as the penetration of digital
television increases.

While licence renewal has brought increased certainty to the group and all our
businesses are in good shape, the economic outlook is less certain. While many
commentators are predicting an upturn in the second half, a number of
advertisers have been holding back on marketing budgets and only committing
spend on a very short term basis, thereby reducing our visibility on prospects
over the coming months. As a consequence, we are managing our businesses, and
controlling costs, very tightly.

In Television, trading is currently down approximately 9% on the buoyant
conditions experienced in the first quarter of 2000 and with the added burden
of increased licence payments the first six months of this year will be
challenging. Radio is achieving revenues around the level of this time last
year, which is a good result given current trading conditions and the falling
away of dot.com advertising. Publishing and Out of Home have started the year
well but we remain cautious, given the lack of visibility in the marketplace
even a few weeks ahead.

Across the Group, we continue to deliver high levels of satisfaction amongst
our viewers, listeners and readers and we are well placed to take advantage of
any improvement in sentiment.

Don Cruickshank

Chairman, SMG plc


Enquiries:


Callum Spreng, Director of Corporate Affairs

0141-300-3605