Reporting its preliminary results for the year ending September 2004 today, Capital said it had seen early success from the national growth of Xfm and Capital Gold, with both stations attracting additional listeners outside their analogue transmission areas.
Xfm has been particularly successful with this new audience and is now being sold to advertisers as a national proposition.
However, it reported impaired advertising prospects, saying that the quarter from October to December is looking more challenging as the market has seen some slowdown in spend among key advertisers, particularly FMCG clients.
Revenue in October fell 7% against a relatively strong performance during the same period last year, and it said that November looked likely to be down around 5%.
David Mansfield, chief executive of Capital, said: "In 2004, we delivered the group's best year-on-year growth performance for four years and retained commercial brand leadership in the important London market. We continue to strengthen our brands and we will be stepping up our investment in Xfm and Choice FM during 2005. Despite a tough advertising quarter, we remain confident in the prospects for radio."
Choice FM, which was acquired in March 2004, has since seen its like-for-like revenues grow by over 20%.
Capital will hope that its merger with GWR, should it get clearance from the Office of Fair Trading and Ofcom, will lead to similar performance.
The company invested £5.4m in digital operations compared with £4.2m in 2003. It maintained its total dividend at 2003 levels, at 18.5p a share.
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