RG Capital Radio Ltd has announced a full year net profit of $10.5 million, with its acquisition by Macquarie Bank’s Regional Media Limited to be completed later today.
MacBank should be delighted with the state of affairs at RG Capital, which has posted a profit increase of 8.7%.
Pre-tax operating profit has risen 11.1% to more than $14.9 million (up from $13.43m), while total revenue is $65.2 million (up 8.3% from $60.2m).
Chairman, Brian Bickmore, has explained some of the reasons behind the solid result: ”The year saw a strong rebound in national advertiser activity in the group but it was patchy and favoured provincial rather than rural markets.
“A significant reason for this is the swing in Federal Government activity which was stronger in rural markets during the past year. Significant advertising in the property development area buoyed provincial markets.
“Local advertising was particularly strong in all but a couple of problem markets. The result was all the more pleasing as it includes the launch of new competitors on the Gold, Sunshine and Central coasts.
“Strong tourist numbers and retail sales in our tourist markets have driven solid growth numbers. Rural markets in many areas have rebounded with the easing of drought conditions.”
On the takeover front, a copy of a Federal Court order, approving two schemes of arrangement for Macquarie Bank’s acquisition of RG Capital, has been lodged with the Australian Securities and Investments Commission (ASIC).
The lodgement means the two schemes, between RG Capital and its shareholders and optionholders, have become effective.
It has also allowed RG Capital to apply for suspension of trading on the Australian Stock Exchange.
The acquisition by Regional Media Pty Ltd will be completed today. Around this time, shareholder cheques are due to be sent out.
The recent shareholders’ meeting on the Gold Coast voted to go ahead with the acquisition, with 90.75% voting in favour of the sale. Federal Court approval was the last stage in the process.
Regional Media will acquire the shares for $3 each, as foreshadowed by the ‘scheme of arrangement’, and Macquarie Bank will gain dividends by administering the company.
Reg Grundy, through his investment company, RG Capital International, held about 56% of all issued shares, while institutions and staff had the remaining parcels.
Brian Bickmore paid tribute to the Board and management of RG Capital Radio in developing a very successful business.
“Many people underestimate the amount of time and effort involved from Board members when a process such as this occurs and I would like to thank them for their support and hard work.
“Equally, Rhys Holleran, Kym Gallagher and the rest of the management team and employees at the company deserve praise for the professional way they have dealt with this process, as well as their dedication to running the business and achieving excellence in radio.
“I also want to recognise the role of majority shareholder, Reg Grundy, in all phases of the company’s growth. Mr Grundy was instrumental in founding the company, funded it through its growth in the 1990s and has continued to support it through listing on the ASX and remains involved to this day.”
Additionally, Bickmore has noted the special contribution of former RG Capital Chairman, Tim Hughes: “Tim has been the driving force in growing RG Capital Radio from a small station to a truly national regional radio network. Without his hard work and vision, RG Capital Radio would not be the company that it is today.”