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UBC has high hopes for Cliq

Important new development at UBC

UBC has radically changed its business plan. To allow the company to focus on supplying radio stations with services its 80 per cent owned network of radio stations has gone. The services business has two strands. The first offers free content to radio stations in return for advertising time. Sales here rose 13 per cent to £5.44m. The other produces digital content for clients including the BBC, and saw sales rise 18 per cent to £1.68m. There is also a division that sells software for displays on digital radios but in the six months lower margin contract work was reduced so sales fell by nearly a third to £460,000.

IC TIP: Hold at 9.75p

For the sale of 18 radio licences to GCap Media, UBC received £3.95m, which will help finance UBC’s new venture, Cliq, which was finally launched in December. In the short term Cliq will allow 12m commercial radio listeners to buy music tracks via a mobile phone and download them over the internet. UBC spent £1m on this venture last year, it will spend £2m this year and the same figure for the next two years: breakeven is 450,000 users spending £5 a month. But of course the idea can be developed so that radio not only becomes interactive but will be able to sell a wide range of goods and services to listeners. Next summer this technology using WiFi will be embedded in Pure digital radios.

Broker Seymour Pierce expects start-up losses until March 2010 with an overall deficit of £1.1m this year and £1.3m in 2008-09.

UBC MEDIA (UBC)

ORD PRICE:9.75pMARKET VALUE:£ 18.8m
TOUCH:9-10.5p12-MONTH HIGH:16.75pLOW: 8p
DIVIDEND YIELD:nilPE RATIO:NA
NET ASSET VALUE: 4pNET CASH:£5.0m

Half-year to 30 SeptRevenue (£m)Pre-tax profit (£m)Earnings per share (p)Net div per share (p)
20066.90103.00.02nil
20077.57-249.0-0.17nil
% change+10