Radio Avon profit dips in first half

Press, 10 December 1983, Page 25

Radio Avon profit dips in first half

Radio Avon, Ltd, had an unaudited tax-paid trading profit for the six months to September 30 of about $42,200, down $56,300 on the result for the corresponding period last year. Revenue in the half-year was up 1.1 per cent to $931,513 and expenditure at $853,728 was up 15 per cent.

Radio Avon will pay an interim dividend of 2.5 cents per 25 cent share on January 20. The profit was arrived at after providing $34,500 for tax (last year $80,600) and $29,319 for depreciation ($28,902).

In spite of the profit fall and a reduced dividend, aspects of the company’s operations and investments were encouraging, the directors said yesterday. Advertising sales for this month and November, were well in excess of budget, “and if budgeted sales are attained in January, February and March, as seems likely at this stage, the trading result for the final six months will be substantially better than for the first six months,” they said. The performance of Foveaux Radio, Ltd, had improved sharply over its first six months to September 30, reflecting a 28 per cent increase in revenue and a 1.4 per cent increase in expenditure. Radio Otago, Ltd, had also improved its performance in its first six months to last May 31, with profit up 108 per cent on the previous year to $28,313. “The improved sales of

all three stations over recent months reflects mainly increases in local sales.

“There is some optimism as to an improved performance by PRISM — the private radio national sales organisation — producing increased national sales in the near future,” the directors said.

Equity accounting of the profits of two associated companies increased the net profit of Radio Avon by approximately $3BOO, reflecting 24 per cent of the retained profits of Radio Otago, for the six months last May 31 ($3232) plus 25 per cent of the profit of Foveaux Radio for the six months to September 30 ($565). Amortisation of good will paid in respect of shares in Radio Otago, amounting to $4300 reduced unaudited tax-paid profit to approximately $41,700, compared with $77,000 last year. Last year’s figure reflected the equity accounting of the share ($6800) of the loss of Ohau Ski Area, Ltd, for the year ended October 31, 1982.

Accounts for that company, in which Radio Avon has a 25 per cent holding, for the year to this October are not yet available and a share of the loss incurred by Ohau in the latest year has not been equity accounted. Last year, equity accounting of the share of the loss of Foveaux Radio reduced the Radio Avon net profit by $lB,OOO and equity accounting of the share of last year’s profit of Radio Otago added $3234 to net profit.