‘Further growth in Radio Avon’

Press, 27 May 1978, Page 19

‘Further growth in Radio Avon’

Since the announcement of .he recommended increase in the final dividend by Radio Avon, Ltd, there has been : speculation about the future ; growth of the company, says i the chairman (Mr P. L. Mortjlock) in the annual report. “It has been suggested that the company’s profitability from the activities of Radio Avon must be limited by the number of minutes advertising time that can be sold. “In the interests of acceptable programming, the company imposes a limit on the amount of advertising at a level well below , the maximum imposed by the broadcasting rules. “No increase in the number of minutes of advertising an hour is contemplated, but there is room for further efficiency.” Mr Mortlock says after two years of study it was decided

i to lease a computer to handle among other things, advertising schedules, as well as the general accounting functions of the company. As announced, group net profit more than doubled from $102,068 to $215,338 in the year to March 31. Income from advertising, investment and “other income,” rose 50.4 per cent to $1,261,838, while expenses increased 33.3 per cent to $962,000. The profit was after providing $3695 more for depreciation at $29,863 and $102,500 more for tax at ' $184,500. Total shareholders’ funds increased $180,257 to - $559,177, including an in- ; crease in ordinary share capi- ■ tai of $12,501 to $242,302, and $21,227 in capital re- 1 serves after a revaluation of 1 Radio Avon’s share -of the ; Kilmore Street building. Re- j

tained earnings accounted for the rest of the increase. The earning rate on the funds rose from 26.9 per cent to 38.5 p«r cent, while that on capital increased from 44.4 per cent to 88.9 per cent. A recommended final dividend of 9c a share makes an increased annual rate from 6.5 c a share to 17.5 c a share (35 per cent), after taking into account the two interim dividends paid during the year. The dividend requirement is $84,806 and is covered 2.5 times by the profit. Working capital rose $160,786 to $379,351, and the current ratio was steady at 2.3 to one. The shares last sold for 210 c for a dividend yield of 8.3 per cent, and an earnings yield of 20.8 per cent. The price-earnings ratio was 4.7.