LRC to raise £1.5m
THE Local Radio Company (LRC), which has stations in Cheshire and Lancashire, is planning to raise £1.5m after posting a full-year loss.
The group, which has 20 stations throughout the UK, said it needed the cash to carry out a “radical” restructuring that was required to keep the business afloat. It lamented the state of the radio market which has been hit by a sharp decline in advertising spend.
In a statement to the stock market chairman Anthony Gumbiner said: “Commercial radio is experiencing significant commercial and structural challenges. Indeed, recent estimates from the industry trade body, the Radiocentre, suggest the industry as a whole is now loss making.”
In an “extremely challenging” year the group said it was losing listeners to BBC stations and advertising revenue was down 8% in the third quarter of 2008 compared with 2007.
Last year the group sold seven stations including Southport’s Dune FM and in January it pulled its support from Barrow-in-Furness’s Abbey FM which is now in liquidation.
At the heart of the restructuring plan is LRC’s decision to sell its flagship station, London’s Jazz FM. It also wants to tackle the group’s cost base which could affect its North West stations, Silk FM in Macclesfield and 2BR in Burnley.
During the year to September 30 turnover at LRC was static at £14.7m but it racked up a pre-tax loss of £5.6m, although this was an improvement on 2007’s £7.9m loss.
The directors insisted they still, “believe in the long-term strategy of owning local radio stations and local media assets” and will continue to support stations in regions where the group has a strong presence.
Existing Shareholders are being offered 42 open offer shares for every five existing ordinary shares at a price of 0.25p per share. The cash will be used to restructure the business and provide general working capital.
High Wycombe-based LRC was formed in 2004 to acquire Radio Investments, one of the first investors in commercial radio. It now plans to change its name to Radio Investments.
