Leading UK radio broadcaster, GCap Media declared that it would be axing up to 100 jobs, in its attempt to fulfill its cost savings target of £25m following May’s merger of GWR and Capital Radio.
Owning Classic FM as well as 95.8 Capital FM in London, GCap made it clear that around 70-100 job cuts out of the 1,400 jobs, would be affected in its bid to attain the lofty cost savings figure of £25m that had been considerably raised from the £7.5m target fixed during the merger. These savings would lend an £18m boost to the pre-tax profits of the coming year.
Other significant moves at GCap involved Ralph Bernard assuming seat as executive chairman and substituting former CEO, David Mansfield. Two other employees of Capital Radio, commercial director Linda Smith and operations director Paul Davies, decided to call it quits on Wednesday.
Rejecting analysts’ claims that the company was too slow to wake up to its problems that were further aggravated due to the radio advertising slump, Bernard said, “We have done nothing differently to what we said we'd do. We said we would have a strategic review and we have given out full information on the declining revenue market. This is I hope the first stage in giving confidence ... that this business has got a grip of itself and is very clear about its direction.”
He also added that nothing had been decided as to what would be done with the cash, albeit the firm stated in a trading report that a certain amount of the savings would be ploughed back into its analogue radio stations. Shares at GCap scaled 14% high to 315.75p with experts hiking profit forecasts, and raised hopes that the money would be returned back to the shareholders.
GCap had issued a warning of a feeble performance, considering the severe downturn of the summer advertising market that had been hit by weak consumer confidence and a resulting low-budgeted market. It announced on Wednesday that its half-year profits ending September 30 were 9 % down.
Posted
on : Thu, 29 Sep 2005 13:05 GMT | Business News
By : Pippa Fielding
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