Podcasts and audio-streaming services threaten to relegate conventional radio to history. Wireless (WLG) thinks otherwise: the rebranded UTV has sold its television business to ITV and will now focus its full attention on the airwaves. But it could have its work cut out after adjusted operating profits slid 8 per cent to £13m in 2015.
Sales and profits tumbled more than a tenth in the Irish radio business, and the lack of a World Cup weighed on revenues in the main Radio GB business*. Management mitigated the fallout by hiking advertising rates at talkSPORT, capitalising on its flagship station's popularity among a young predominantly male audience with cash to burn.
Wireless netted £98m from the ITV deal. It has returned about £51m through a share issue, completed a 5-for-7 share consolidation and plans to pay a special dividend of £4.2m - or 6.1p a share - this summer.
Nonetheless, Numis expects net debt to shrink by four-fifths in 2016. The broker expects pre-tax profit and EPS of £9m and 9.8p respectively, jumping to £14.5m and 17.5p in 2017 - due to the reduced share count and lower costs and investment (2015: £10.7m and 8.6p).
*This article was updated on 13 April to explain the year-on-year revenue fall at Radio GB.
| WIRELESS (WLG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 192p | MARKET VALUE: | £132m | |
| TOUCH: | 190-192p | 12-MONTH HIGH: | 195p | LOW: 134p |
| DIVIDEND YIELD: | 4.9%† | PE RATIO: | 11 | |
| NET ASSET VALUE: | 158p* | NET DEBT: | 42% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 122 | -21.7 | -26.9 | 6.00 |
| 2012 | 112 | 20.1 | 15.3 | 7.00 |
| 2013 | 107 | 17.0 | 15.2 | 7.00 |
| 2014 (restated) | 82 | 11.9 | 9.5 | 7.25 |
| 2015 | 75 | 17.6 | 18.1 | 9.42** |
| % change | -9 | +48 | +91 | +30 |
Ex-div: 19 May Payment: 15 Jul *Includes intangible assets of £167m, or 243p a share **Calculated after share consolidation †Excludes special dividend of 6p a share to be paid in July 2016 | ||||
