SCOTTISH Radio Holdings yesterday announced a 28% jump in interim pre-tax profits to #5.76m and revealed it was joining the fight for the new Central Scotland radio licence.
Strong performances from both its radio stations and local newspapers, coupled with tight cost control, were behind the much- better-than-expected results for the six months to March 31. The figures prompted a wave of profit upgrades among City analysts.
Richard Andrews, analyst at stockbroker Greig Middleton, raised his prediction for full-year pre-tax profits from #10.4m to #11.7m. Angela Maxwell, media analyst at Sutherlands, said she would be raising her forecast from the #10.8m she had pencilled in before yesterday's results.
Shares in Glasgow-based Scottish Radio, which started the year at 375p, have had an extremely strong run. They put on another 5p to 494p yesterday. The company raised its interim dividend by 20% to 3.60p.
Chief executive Richard Findlay, who was not hiding his light under a bushel yesterday, proclaimed: ''I think they are yet another glittering set of results. I think the shareholders can be pleased yet again and, of course, we are delighted.''
Findlay revealed that the company would be joining the 10 or more companies and consortia expected to apply for the new FM licence for Central Scotland. The licence area offers a potential adult audience of 2.3 million people.
He said Scottish Radio, which has Radio Clyde as its flagship, would have a stake of about 20% in a consortium which will bid for the new licence. He declined to reveal the identity of its co-venturers but said it was the only independent radio company in the consortium.
Others who intend to bid include Carlisle-based Border Television, a consortium including ITN and the Reuters news agency, Chrysalis Radio, London News Radio, Jazz FM, and a consortium including Independent Radio Group, which runs 96.3QFM in Paisley and Scot FM. Applications are due in by July 28.
But Findlay played down the importance of the new licence. He does not see victory for a competing bidder posing any threat to Scottish Radio's dominant position north of the Border. ''(It) isn't going to change anybody's life more than Scot FM has done. It is going to be fairly small beer,'' he claimed.
Findlay believes it will be at least six weeks before Scottish Radio hears whether it has won the regional licence for the North-east of England, which covers Newcastle, Gateshead, Sunderland, and Durham. He said this was bigger than the Central Scotland licence.
Scottish Radio, which had net cash balances of #5.6m at end-March, continues to seek further acquisitions in radio and weekly newspapers. Further expansion in radio is likely to come in England but Findlay said there was scope for expanding its 31-strong weekly newspaper portfolio ''across the United Kingdom''.
Scottish Radio will apply to operate a digital radio transmission network in its key markets of Central Scotland and Northern Ireland and Findlay said it was examining how many transmitters would be required. Applications for an operator for the Glasgow area are expected to be sought in the autumn. Radio companies which grasp the digital nettle will be rewarded with an eight-year extension to their licences, which Findlay said would take Radio Clyde to 2008.
Interim operating profits from newspapers, which have been part of Scottish Radio's business for less than three years, increased from #1.37m to #1.83m and accounted for 30% of the total. Lower newsprint costs lent a hand.
On the radio side, operating profits jumped from #3.14m to #4.17m. Group turnover was up 16% at #21.3m.
Scottish Radio chairman Lord Gordon yesterday realised #50,000 by selling shares in the company. Deputy chairman Hamish Grossart and his family spent #63,240 acquiring shares.
Meanwhile, rival Independent Radio Group told shareholders at its annual meeting yesterday that it was in the final stages of submitting its joint bid for the new Central Scotland licence and that it had applied for an FM licence covering Bolton and Bury.
Finance director Tony Dewhurst said its stake in the consortium bidding for the Central Scottish licence would be between 30% and 50%.
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