RG Capital Radio’s annual results

RG Capital Radio’s annual results were well received by the markets when Executive Chairman Tim Hughes announced a full year EBITDA of $18.7m and a net profit after tax of $8.2m (up 13.6%).

Against the market trend RG’s local sales were up and costs were tightly controlled. The company paid a full year dividend of 10.5 cents, exceeding market expectations.

Hughes said: “Our results are very pleasing. Our advertising revenue has grown further in the second half to produce an overall growth on the prior year of 3.6% Our net profit has grown 13.6% to $8.2m. This has been driven by local sales up 6.6% and strict cost controls which have limited operating expense growth to 1.65%. We are pleased we have exceeded analysts’ expectations and our shareholders have been rewarded by a 31% increase in total dividend from 8 cents last year to 10.5 cents this year. We remain cautiously optimistic with regard to the current financial year.”

Managing Director Rhys Holleran explained the importance of local sales to the group:

“Local sales now represent 78% of our sales up from 76% last year. Local sales increased by 6.6% and have been driven by our live and local formats and proactive sales and promotions… National sales were down by 8% and continue to be patchy.”

During the year RG Capital acquired 50% of NXFM and KO FM Newcastle and launched the Sea FM Radio services in South Burnett, Queensland and Gippsland, Victoria. A survey is expected for the revised Gippsland and Latrobe Valley RG Capital service areas in Victoria some time in the next year.

RG Capital Radio’s earnings per share was 14.3 cents. A final dividend of 6 cents fully franked will be paid on September 27, taking the total dividend for the year to 10.5 cents.

Revenues from ordinary activities were up 1.6% to $57,495,000. Expenses from ordinary activities increased from $41.8m to $42.2m.

Employee expenses were the company’s biggest cost item at $21,696,000, up only slightly from $20,056,000 last financial.

Other expense items included:

Licence fees $711,000 (last year $732,000)

Copyright fees $1,916,000 (last year $1,774,000)

Agency commissions $2,886,000 (last year $3,035,000)

Promotions and marketing $1,924,000 (last year $2,160,000)

RG Capital Radio has been rewarded with a share price rise since the announcement of the results last month, and is currently trading at $2.20 per share.