Last year, SMG disposed of its minority stakes in Scottish Radio Holdings and GMTV, which increased pre-tax profits to £25.3m. Without counting these gains, pre-tax profits were £17.5m, compared with £16m in 2003.
Virgin Radio's turnover fell by £3.1m to £20.1m. Costs including increased digital transmission and marketing meant that profits fell to £4.3m from £7.3m in 2003.
SMG recently faced an attempt to wrest the station from its grip after Lord Alli approached it with a £100m bid for Virgin Radio, claiming it had underinvested in the station.
After SMG rebuffed the offer, Lord Alli is believed to have approached its shareholders with a plan to buy SMG and sell off its two ITV franchises, but was forced to give up after failing to attract support from ITV, which did not want to buy SMG's Scottish TV and Grampian TV stations.
However, SMG said first-quarter 2005 figures looked good and it expected radio revenues to increase 8% on the weak fourth quarter of 2004.
The poor 2004 performance was attributed to a poor national advertising market and "erratic" audience figures. Virgin Radio says it is working with Rajar "increase the robustness" of its listening figures.
The station's national reach is 2.46m for the fourth quarter, down 4.4% on the same quarter in 2003.
SMG defends Virgin Radio by pointing to its potential in digital, where signal quality is better than its national AM platform. It is selling its advertisers the additional listening hours from the digital-only (online and London DAB) stations Virgin Radio Classic Rock and Virgin Radio Groove "as part of the Virgin Radio Network proposition".
SMG's lift in profits came from its TV interests, while its combined outdoor advertising and cinema division also disappointed.
The Scottish TV and Grampian TV stations grew advertising revenues by 8% and total TV operating profits were £23m compared with £18m in 2003. First-quarter 2005 revenues look set to increase by 8%.
The outdoor and cinema division made a profit of £4.3m on revenues of £47.6m, compared with the 2003 profit of £5.5m on revenues of £43.8m.
The dip was caused by investment in the Primesight poster estate and new terms on major exhibitor contracts with Primesight and the Pearl & Dean cinema sales house.
Pearl & Dean is to focus on growing its share of the independent cinema sector following the significant loss of the UGC contract to Carlton Screen Advertising last month.
If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the .
_1.jpg)
.jpg)
