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talkSPORT owner Wireless's swan song falls flat

The international radio group delivered mixed results ahead of its takeover by News Corp
August 23, 2016

News Corp's recent offer for Wireless (WLG) risked stealing the thunder from the radio group's first-half figures, but at least the media titan won't be feeling buyer's remorse. Flagship station talkSPORT and new digital channels performed well, although one-off costs and advertising uncertainty ahead of the EU referendum meant adjusted operating profits were down a quarter to £4.5m.

IC TIP: Accept at 310p

The Euro 2016 football competition helped talkSPORT attract 3.3m weekly listeners and fuelled robust international growth, driving sales up 7 per cent in the main GB radio segment. Moreover, the station secured live audio rights to Premier League football for the current and following two seasons. Revenues also rose in the Irish radio business, but advertising demand continued to lag the nation's economic recovery. And the fledgling digital division launched three new digital channels - Virgin Radio, talkSPORT 2 and talkRADIO - that attracted more than 220,000 listeners a week. However, management doesn't expect it to turn a profit until 2018.

Wireless - formerly UTV - netted £98m from the sale of its television business to ITV (ITV), and has returned £55m to shareholders. Management used the balance to slash net debt by more than 95 per cent to £1.6m. It stood by its full-year guidance, but warned that the impact of the Brexit vote on ad spending in the critical fourth quarter remains unclear.

WIRELESS (WLG)
ORD PRICE:310pMARKET VALUE:£213m
TOUCH:310-314p12-MONTH HIGH:325pLOW: 151p
DIVIDEND YIELD:3.4%PE RATIO:13
NET ASSET VALUE:199p*NET DEBT:1%

Half-year to 30 JunTurnover (£m)Pre-tax profit (£m)Earnings per share (p)**Dividend per share (p)**
2015 (restated)37.15.05.12.55
201638.24.54.4nil
% change+3-10-13-

*Includes intangible assets of £176m, or 256p a share †Excludes special dividend of 6.15p a share, paid in July 2016 **Adjusted for five-for-seven share consolidation in March 2016