Today it said that it still sees an IPO or a sale as options for disposing of Virgin Radio, which was hit by the defection of chief executive Paul Jackson to GCap Media on August 31.
SMG has now filled the executive post by making Richard Huntingford, who joined Virgin radio as chairman from Chrysalis in August, into executive chairman.
Virgin Radio proved the only highlight of SMG's financial performance during the first six months of 2007, which was marred by several exceptional costs.
Virgin Radio was the only part of SMG to grow operating profit, from £2m in the first half of 2006 to £2.5m in the first half of 2007.
SMG's TV division experienced a 56% drop in operating profit to £3.9m while its outdoor media division Primesight dropped 50% to £800,000. Its Pearl & Dean cinema ad business repeated its first half 2006 £300,000 operating loss.
Last month, SMG agreed a deal to sell Primesight to its management, backed by private equity firm GMT, for up to £62m. SMG shareholders will vote on the approval of the deal at the company's EGM on October 15.
Pearl & Dean's troubles have forced SMG to set aside £11.4m to cover future losses arising from the division's "onerous" contract with Vue cinemas.
In addition, SMG is now counting Virgin Radio as a discontinuing business and has written down its book value by £26.6m to £85m. Analysts have valued the company at closer to £60m and a recent process of inviting trade bids is believed not to have produced any offers near £85m.
SMG's revenues including Virgin were flat at £89m and its pre-tax profit excluding exceptional items was £1m, down from £8m in 2006.
The company said it would not pay a dividend for the first half.
Richard Findlay, chairman of SMG, said: "SMG is on track to deliver its turnaround plan. The disposal of Primesight will reduce debt significantly and, in Richard Huntingford, we have appointed a very strong leader for Virgin Radio."
SMG's share price, which was at a 12-month low yesterday, rose 1.4% in early trading to 36.25p.
_1.jpg)
.jpg)