Media

Radio talk proves costly for O’Brien

Cantillon: Business has cost O’Brien over €100m despite selling stations in Finland, Estonia and Czech Republic

Results for Denis O’Brien’s Communicorp Group reveal a business intent on downsizing. Photograph: David Sleator
Results for Denis O’Brien’s Communicorp Group reveal a business intent on downsizing. Photograph: David Sleator
Colm Keena's picture
Colm Keena
Thu Dec 05 2013 - 01:01

The 2012 results for Denis O'Brien's Communicorp Group paint a picture of a business intent on downsizing and paying off debt.

The owner of Newstalk, 98FM and Today FM, amongst others, sold its stations in Finland, Estonia and the Czech Republic during 2012, for €6.3 million, and in Hungary earlier this year. It remains “the number one commercial operation” in Ireland, Bulgaria and Latvia. It also has two stations in Jordan.

The group got approximately 60 per cent of its €58 million turnover in the Irish market, and said “a significant proportion” of the reduction in turnover as against 2011 was due to the disposal of some of its businesses.

The group reduced its bank borrowings by €11.8 million in 2012, having reduced them by €19.7 million the previous year. It has paid off a further €9 million this year.

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However, at the same time, its debt to O’Brien continues to rise. He switched €50 million of his loan to Communicorp into equity in 2011, but his advance to the group at the end of 2012 was still a sizeable €53.5 million, having increased by €4 million during the year.

As the accounts put it, trading conditions in the European media market are difficult. A review of intangible assets led to a €39 million impairment charge. Without this, the group would have reported a pre-tax profit of €3.4 million; however when the charge was taken into account the loss was €35.5 million.

All told, then, the radio business has cost O’Brien something north of €100 million.

He does get some money from the business by way of the property and transmitter sites he rents to it. In 2012, the rent from property was €883,590, this being associated with the group’s use of his building on Dublin’s Grand Canal Quay, according to a spokesman. The previous year O’Brien waived this charge. He was paid €637,718 for the transmitter sites, having received €672,600 the previous year.

The spokesman said that while turnover in the Republic was down 2.1 per cent, to €35.2 million, this was significantly better that the overall industry, which suffered a decline of 5.2 per cent in 2012.