Pretax losses at Denis O'Brien's radio group, Communicorp Limited, have tripled, although turnover has risen strongly according to the latest accounts.
Pretax losses were up €1.2 million to €3.2 million in the year ended December 2003. Turnover was up from €15.9 million to €18.1 million, a rise of almost 13 per cent. The company signals in the accounts that it plans to make further acquisitions, mainly overseas, and is not planning to declare a dividend.
Communicorp is one of the largest radio groups in the Irish market with interests in 98 FM, Spin FM, Independent Network News, NewsTalk 106 and East Coast Radio. It also owns a large number of radio stations in eastern Europe. Of its €18.1 million turnover, more than €11 million came from the Republic, with €7.1 million from the rest of Europe.
The accounts show a major contributor to the rising losses was the operating performance of associated companies. Communicorp's share of these operating losses rose from €905,000 to €1.8 million. When a goodwill write-off was added, this figure rose to €1.9 million. The performance of individual stations is not included in the figures.
In 2004 Communicorp made a major $14.25 million acquisition of Metromedia International, a company with radio interests in Bulgaria, the Czech Republic, Estonia, Finland and Hungary. The accounts say the operations acquired "present the Communicorp Group with exciting commercial opportunities in five established markets".
"With the global economic upturn and considerably improved conditions within the advertising markets in each of these jurisdictions, these businesses are well positioned to prosper," the accounts add.
The accounts state that the carrying value of the investments included in the numbers does not fully reflect the "realisable value" of the various businesses.
It says this is based on the purchase prices achieved by radio stations in recent years.
According to the accounts 268 people were employed at Communicorp during the year, down from 277 the year before. Aggregate payroll costs were down from €6.1 million to €6 million. No directors' remuneration or fees were paid, except for a small pension contribution of €25,000.
