TIML Financial Results by Adrian Robinson

17Nov

Absolute Radio has just filed its financial statements for 2008 (year ended 31 December to be precise). What do they show?

To give a bit of context, 2008 was the year which saw the station not only change ownership (on 30 June) but during which it successfully re-branded (from Virgin Radio to Absolute Radio) – something that had not been ever done in the national UK radio landscape before.

The main highlights are as follows:

Revenues for the year in total were £22m. The second half of the year is perhaps of most interest as it coincides with the period of TIML ownership and when the wider economy took a bit of a tumble. In this period, data from Radio Centre shows that the national market was down 9.5% versus the first half of the year. Our revenues were down just a tad over 3% so a great performance in a particularly challenging period. Well done 4th floor!

All very well you might say, but you probably want to know how that compares to others, say TalkSport, in that same period. Having dug through the Stock Exchange filings, we can see that although Talksport’s revenues were up 6% for the year as a whole (well done on that front, whatever floor you are!) they were down 12% in the second half of 2008 versus the first half.

Back to us….. In 2008 we also made a massive investment in re-branding the station, signing up talent, developing content and in our various digital initiatives. Some commentators will focus on the increase in ‘Operating costs’ in the numbers just filed, which are up 24.6% year on year at £24.7m. Yes it’s a big figure, and a big increase, but all that means is that we delivered on our commitments to invest in the station so as to build a top class company, fit for the digital age.

The net result from this is that we made a loss for the year as a whole (£1.9m after tax to be precise, with most of it in the second 6 months) but this is exactly as we planned. Didn’t your teacher always say that if you wanted to be a success you had to work hard and put in the effort up front? Well it’s the same here and we can all be proud of what we have achieved and the innovation that every day oozes from One Golden Square – most recently seen with the launches of DABBL.co.uk and comparemyradio.com.

We also have a strong balance sheet. As hard as you might look you won’t find any bank borrowings, liens, charges, covenants, constraints and the like meaning that, when it comes to finance, we answer to no-one but our supportive parent company.

Anyway there’s loads of interesting information in the statutory accounts (a real page turner really) and there’s only so much I can deal with in this short blog. So if you want to have a read, please click on this link and settle back…

Congratulations and thanks to all who made 2008 an interesting and successful year.

Finally, this is the quote we gave to Media Week. They seem to have missed off a bit of it in their article, so it is re-produced here:

Adrian Robinson, Absolute Radio Chief Financial Officer, “This is exactly where we thought we would be at the end of 2008. The strategy has been to invest heavily in the national launch of Absolute Radio and in the product. We have made new talent signings like Frank Skinner, made a substantial investment in launching and marketing the new brand and continued innovation in the digital space, such as the recently announced dabbl and comparemyradio.com initiatives. This up front investment means short-term losses. However, we are building a successful digital company for the long-term.”

Adrian

Comments (4)

corinna soden @ November 18, 2009 at 3:39 am | Permalink

At last – a company’s end of year results put in a straightforward and understandable way!!
Marty from new yawk @ November 19, 2009 at 1:56 pm | Permalink

I have a few questions:
1, Dividends of 468,000 quid were paid this year to a parent company during a loss year. Can I assume it was paid to the predecessor parent company?
2. The monies paid to the auditors were a total of 36,000 quid (28,000 for audit services and 8,000 for other). Why was this expense not absorbed by the parent company as in prior years?
3. The Directors were paid a total of 144,000 quid in 2008. There is nothing in this report which discloses compensation policies for directors (it may not be required). The amount just seems high considering the company is simply a subsidiary of a parent group of companies.
If you are going to put these statements out here, Adrian, I hope you’ll be good enough to respond to queries. Thank you.
Adrian @ November 19, 2009 at 2:59 pm | Permalink

Marty. Thanks for your questions! Here are the answers:

1. The dividends were all paid pre the acquisition of the station on 30 June so yes, they relate to the predecessor group, SMG plc. No dividends were paid in the period 1 July to 31 December 2008 (under TIML ownership).
2. Just a different way of going about things really. Last year the audits were all co-ordinated and paid for by the then ultimate parent SMG plc (which itself is a substantial entity). This year, under the new group/ownership structure this is the main operating company in the UK so it bears its own cost directly.
3. The directors’ fees all relate to the pre-acquisition period and so represent payments made to the directors who held office up to 30 June 2008. From 1 July 2008, under TIML ownership, none of the directors received any remuneration in respect of their services as directors of the company.

I hope that’s clear but, if not, don’t hesitate to let me know.

Adrian
Marty from new yawk @ November 19, 2009 at 4:56 pm | Permalink

Thanks so much for your reply. Very gracious of you to take the time.