Recovery in TV helps boost GCap shares

Recovery in the television sector has had a positive knock-on effect on radio group GCap Media's share price, which hit an 18-month high of 263p at close of trading last Thursday, up from 217p a week ago.

Analysts have identified the renewed interest in radio, with the purchase of Chrysalis and the rumours of industry consolidation following the announcement of Emap Radio's likely sale, as a reason for the rise in GCap's share value. But shares had fallen to 238p as Media Week went to press, as a result of the general crash in world stock markets at the end of last week.

Patrick Yau, an analyst at Bridgewell Securities who acts as a broker and independent adviser for the Capital 95.8 owner, said ITV has "started to get people thinking again".
"Radio is priced at a certain discount to television, so in an improving television environment, airtime prices for radio are beginning to get stronger," he said.
Yau said that, although the price increase was modest, it was still important. "This has all the makings of a reasonably solid recovery taking place for radio," he said.
A weak third quarter last year, together with the Rugby World Cup this September - which is being shown on ITV - are expected to contribute to a relatively strong autumn in advertising, but a push back from internet advertising is also predicted to benefit other media.
"Internet forecasts have been downgraded a bit, which has been felt in radio and customer publishing," added Yau. "Lots of small things are happening, but if you push them all together, it makes a difference."
GCap's position as the biggest UK radio business and one of the only pure-play groups in the media industry is known to appeal to investors.
Consolidation rumours are also playing a part in the rise in share price, as the industry gears up for the consolidation that GCap chief executive Ralph Bernard has predicted will happen in the next two years.
Separately, GCap has appointed Emap Advertising's Caroline Lucas as regional head of sponsorship, promotions and interactive for East Midlands and the North (Manchester, Newcastle and Glasgow).
Lucas, who was previously sales director radio promotions at Emap, will be based in Manchester and will report to Lewis Burns-Allan, head of regional sponsorship, promotions and interactive.