DARTMOUTH, N.S. – Radio and TV broadcaster Newfoundland Capital Corporation recorded across the board increases during the first quarter of 2005, ended March 31st.
And happily, notes CEO Rob Steele, the company has noticed an increasing demand for radio advertising. Significant increases in revenue were experienced in nearly all of its markets. Most notably, Ottawa’s revenue (Hot 89.9 FM) increased dramatically over the same period last year as a result of the station becoming more mature in the market. Other markets experiencing substantial revenue increases included Edmonton (96X, KRock), Halifax (780 KIXX, Q104 and KOOL 96.5) and Moncton (C103, XL 96) which grew 19% on a combined basis. “The strength in national sales along with healthy local revenue increases are responsible for these favourable results,” said the company.
Q1 highlights include:
* Revenue growth of 18% to $15.7 million.
* Earnings before interest, taxes, depreciation and amortization (EBITDA) improved from $1.5 million to $3.1 million.
* Net income was $1.5 million, as compared to $2.6 million for the same period last year. However, 2004 included a one-time $2 million after-tax gain on disposal of its interest in a publishing company. Excluding this one-time gain, net income increased by $900,000.
During the busy quarter, Newcap also concluded its acquisition in Lloydminster, Alberta, a deal which also brought broadcast TV stations under its umbrella for the first time. In 2004 it acquired the broadcasting assets of Shortell’s Limited and its related companies for $12.9 million. The assets include radio stations CKSA-FM and CILR-FM; television stations CKSA-TV and CITL-TV and the majority interest in an outdoor billboard business. The television stations are national affiliates of and CBC (CKSA) and CTV (CITL).
The company also entered into agreements to purchase radio assets in Red Deer, Alberta (buying Corus’ CIZZ-Zed 99 FM and CKGY KC Country for $9 million) and Winnipeg, Manitoba (CKVN Radiolink System – Newcap’s first Manitoba presence – for $1.8 million), pending CRTC approval.
Newfoundland Capital Corporation has 65 broadcast licenses across Canada which currently serves 22 communities in Alberta.
“The start of this year exceeded our expectations. The first quarter has demonstrated strong revenue growth momentum," said president and CEO Steele, in a release. “We invested significant resources in this quarter to focus on our planned business acquisitions and long-term strategic goals to set the stage for the future."
One of the company’s primary objectives is the expansion of its radio network in regional markets across Canada. The Company is progressing steadily towards its goal of building a national presence by acquiring attractive assets in underserved markets and selectively applying for new licenses through the public process, says the release.
To that end, the company has added – or is requesting – new licenses. In November 2004, the company was awarded a new FM broadcast license to serve Fredericton, N.B. The license will be used to establish a "Classic Rock" radio station format to be broadcast at 92.3 FM. The Company plans to begin broadcasting by mid 2005.
And, to better serve smaller communities in Alberta which currently have AM services, the Company requested approval from the CRTC for three new FM licenses and permission to convert three AM signals to FM. The launch of six new FM services in Alberta began in 2004 with stations launched in Hinton, Cold Lake and Jasper. In January of this year the Wainwright station went on-air. Branded Wayne-FM, the station is showcasing adult contemporary music. The two remaining stations will be on-air in 2005 and are expected to contribute positively to the Company’s operating performance.
As 2005 moves forward Newcap said it expects the strong revenue momentum to continue in the second and subsequent quarters.
For the full release, go to www.ncc.ca.
