Border Television shares slipped 7.5p to 435p after the company surprised the market by announcing pre-tax profits slashed from #2m to #725,000, against expectations of a rise to #3m.
But the company's booming radio interests, which have
boosted the shares from around 300p a year ago, should produce medium-term growth and keep the business on track to achieve an equal split between radio and television turnover within two years.
Chairman Jim Graham said Border had ''achieved its target
of becoming a fully-fledged
bi-media group - the only ITV licensee with substantial interests in commercial radio, the UK's fastest-growing advertising medium''.
Paul Richard at WestLB Panmure commented: ''They have done incredibly well in building up the radio business in only a couple of years.''
He said Border, which has already fought off an approach from Scottish Radio Holdings, could become increasingly attractive to the big radio groups such GWR and Emap and Chrysalis.
Radio turnover almost doubled to #6.69m, while group turn-
over rose by 26% to just under #20m.
Operating profits were down from #2.81m to #2.37m, after absorbing #700,000 in promot-ing the new Century 105 in Manchester and rebranding another station into the Century format. But on top of that
exceptional start-up and other
pre-operational costs were almost doubled at #1.3m.
Earnings per share were pushed down from 17.1p to 13.1p but the dividend was raised by 16% to 5.8p ''reflecting confidence in the present trading position''.
In a significant year for Border it secured the north-west regional radio licence in competition with bigger rivals such as Scottish Radio, giving it access to
5.4 million listeners in the
biggest regional franchise outside London.
''After only eight months Century 105 has achieved remarkable success, with 10% of the population in the north-west listening for more than 10 hours a week, a figure well above expectations,'' the company said.
In January, Border appointed Chrysalis to sell national advertising for the three Century stations, alongside its own brands, giving
a combined population coverage of 34 million. ''This powerful grouping is delivering results above our previous expectations,'' said the statement. The two companies have also joined forces to bid for the first London digital radio multiplex licence.
Television advertising grew by 11%, well ahead of the 7% network average, and Border region achieved a 44% share of peaktime viewing, again well ahead of the 1999 network target of 39%.
The company said the new financial year had started well with radio revenues continuing to advance strongly and television revenues also ahead of last year. Cost control is said to be ''firm across both divisions'', and the completion of a hefty investment programme should see a sharp cut in net debt.
Jamie Mathieson at Bell Lawrie White said: ''The television business is clearly going well but it does look as though operating costs must have risen as well. They have done well to pick up so many radio licences, but it will be some time yet before we see how they actually do.''
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