Foveaux incurs loss

Press, 10 December 1981, Page 23

Foveaux incurs loss

Foveaux Radio, Ltd, the Invercargill private radio company, incurred an unaudited loss of $111,300 in the six months to September 30, the directors announced yesterday. The station had been broadcasting for five of the six months, and during this period the company completed the construction, commissioning, and establishment of the station, and the recruiting and training of the operational staff. The income of $221,200 was higher than forecast, but expenditure at $332,500, including $19,700 for depreciation was also more than forecast, resulting in a larger loss than was expected at this

stage of the company’s development, they said. The loss came mainly from costs associated with start-up operations, which earned no income, and these costs were not expected to occur again.

There was an unanticipated levy of $6OOO from the Independant Broadcaster’s Association to help cover costs associated with presenting the private enterprise radio industry’s case at the FM hearings of the Broadcasting Tribunal.

There were also unexpected costs arising from the additional capital required to establish the station. This had been funded by the lease-back of some of the equipment with the company’s bankers. The company recently re-

leased results of an independant survey of the radio listenership in Invercargill which showed the Foveaux Radio had about half the commercial radio audience. These results confirmed the company’s market, and provided a sound foundation for growth, the directors said. The directors had taken steps to maximise the benefits of the audience shares obtained.

“The beneficial effect of these steps is already evident in results since the reporting period, and the directors are confident that there will be a significant improvement in the results for the next six months,” they said. Radio Avon, Ltd. the Christchurch private broadcaster, has a 24.9 per cent interest in Foveaux Radio.