Local Radio Company PLC (The)
12 September 2005
12 September 2005
The Local Radio Company Plc
Creation of a new force in radio sales,
Trading update and business restructuring
National sales agreements
The Local Radio Company Plc ("TLRC") has entered into an agreement with Ulster
Television plc ("UTV") regarding the national and regional advertising sales of
the 17 local commercial radio licences that UTV acquired when it purchased The
TLRC has entered into a representation contract for these stations through its
subsidiary, First Radio Sales ("FRS"). These stations were previously
represented by Impact Radio Sales.
In addition to entering into this contract, TLRC and UTV have agreed that FRS
will become a jointly owned venture with TLRC transferring a 50% stake in FRS to
UTV in return for the contract and a cash payment of £500,000. The enlarged
business will start trading on 3 October 2005.
Under this agreement FRS will now represent 113 local radio stations across the
UK accounting for 46.6 million hours per week, which is 13% of all local
commercial listening. FRS will also become the second or third largest radio
sales point in each of the main TV regions outside London.
Richard Wheatly will be Chairman of the jointly owned venture and Neil Webster,
currently Managing Director of TLRC's FRS operation, will be Managing Director
of the new, enlarged operation.
Commenting, Richard Wheatly, Chief Executive of TLRC, said: "This joint venture
will be a compelling force in the national radio sales market providing clients
with a fantastic buying opportunity for local radio. We are delighted to be
working closely with the team at Ulster."
Scott Taunton, Managing Director of UTV Radio, said: "The existing team in FRS
have demonstrated the value of ILR stations to national advertisers. With the
addition of UTV's 17 stations and the integration of sales teams, I am confident
that this proposition will be further strengthened."
TLRC reports that sales for the 11 months to 31 August are up 24% year on year,
2% up on a like-for-like basis. This compares with sales increases for the
first six months of the year of 19% year on year, 4% like-for-like.
TLRC's overall sales performance continues to be ahead of the sector and
although trading is below original expectations, the business will be profitable
for the year at the EBITDA level before profit on the sale of 50% of FRS and
exceptional costs, including reorganisation expenses.
TLRC last week won its third new licence since flotation in Swindon. The start
up costs of these three new businesses combined with the challenging conditions
in advertising markets, lead the Company to continue to be cautious about the
outlook for next year.
Management changes and restructuring
John Sanderson, 60, Managing Director of the Local Radio Company's radio
division is to retire from the Company and will consequently step down from the
Board. His resignation is to be effective from 9 September 2005.
He had intended to retire in the early part of next year, however this has been
brought forward for personal reasons.
Richard Wheatly said: "John has been a great support in the initial phases of
the development of The Local Radio Company. We wish him well in his retirement
from the Group."
Following his departure the Company will restructure its local sales and radio
management operations to improve performance. Management responsibilities for
the radio business will be taken on directly by Chief Executive, Richard
- ENDS -
For further information, please contact:
Richard Wheatly, Chief Executive
Alistair Mackenzie, Finance Director
The Local Radio Company Tel: 020 7467 9045
Matthew Moth/Caroline Sturdy
Madano Partnership Tel: 020 7378 7033
Notes to Editors:
The Local Radio Company Plc was floated on AIM in May 2004 when it acquired the
22 stations owned by Radio Investments Limited. It now owns 27 commercial radio
stations, a 32.5% stake in The Bee (the station for Blackburn which will
commence broadcasting on 1 October 2005 on 107 FM) and 100% of Durham FM which
will commence broadcasting in November 2005. It has also just been awarded the
new licence for Swindon, Now FM.
Ulster Television plc acquired The Wireless Group plc in June 2005. The local
commercial ration stations of UTV include Signal FM, Swansea Sound, Pulse FM,
Tower FM, Imagine FM, Radio Wave 96.5 FM, Wave 102 FM, Peak FM, Q96, 107.7 The
Wolf, Wish FM and Wire FM.
This information is provided by RNS
The company news service from the London Stock Exchange