DARTMOUTH – Thanks to new stations – from acquisitions and launches – radio broadcaster Newfoundland Capital Corporation saw a big jump in revenue in the first quarter of 2006, ended March 31st.
Revenue grew by 18% compared to Q1 2005 to $18.6 million. EBITDA increased to $3.2 million from $3.1 million and net income of $1.2 million was $300,000 lower than last year primarily due to higher depreciation and interest costs related to recent acquisitions, says the press release.
The company recently received CRTC approval to add three new FM radio licences to its portfolio, the right to convert an AM signal to FM and to convert a repeater station to a full-status originating station. The details of which are: the acquisition of CKJS Limited, in Winnipeg, Manitoba. This is the second acquisition in Winnipeg in the past six months. The transaction was completed subsequent to quarter end on April 30, 2006.
A new FM licence in Charlottetown, Prince Edward Island was granted and permission to convert its existing station, CHTN-AM, from an AM signal to FM. A new FM radio licence in Lac La Biche, Alberta was approved, as was a request for full-station status in Bonnyville, Alberta.
"The start of this year is encouraging given our stated growth objective. We were successful in winning approvals for licences in important radio markets", said Rob Steele, president and CEO. "Despite the increasingly challenging competitive environment, the investments made in the prior years are demonstrating positive results and are contributing to another important goal – growing incremental revenue."
Somewhat troubling, however, is the decline in organic, or same-station ad revenue. The decrease in organic revenue growth is predominantly a result of new competition in the Edmonton market, says the release. To mitigate the effect of the change in the competitive environment the company converted the format of one of its radio stations in late 2005 (to country-Jack station format Big Earl, as reported by cartt.ca). This change is expected to improve the company’s market share. Format conversions take time to generate results and therefore it will be two to three quarters before the benefits are expected to be realized, added the release.
Newcap owns 73 station licenses in Canada, primarily in small-town Canada.
