SCOTTISH Radio has expanded its media interests in Northern Ireland with the acquisition of Downtown Radio for a maximum of £9.7 million sterling. The Downtown acquisition follows the purchase of the Morton local newspaper group for £11.1 million last year.
Scottish Radio has obtained irrevocable acceptances in respect of 54 per cent of Downtown Radio shares for its offer - a combination of £4.75 million in cash and the tissue of 1.34 million Scottish Radio shares to Downtown Radio shareholders.
According to Scottish Radio, the offer represents a multiple of 16.7 times Downtown's aftertax profits for the year to September 30th, 1995. Those profits were inflated to a considerable degree by exceptional items. The multiple being paid by Scottish Radio puts a very high value on Downtown, the only commercial radio station in Northern Ireland.
In the year to the end of September last year, Downtown had pre tax profits of £890,000 sterling on turnover of £4.55 million. The pre tax profits include an exceptional gain of £890,000 on the sale of Downtown's stake in 98FM and an exceptional charge of £210,000 sterling on the writedown of its Scannervision advertising sign business.
Downtown operates two stations in Northern Ireland, Downtown Radio on medium wave and FM and Cool FM on the FM waveband. The most recent audience survey shows Downtown with a weekly reach of 41 per cent of the population and a share of listening of 31 per cent. Downtown has transmitters in Belfast, Derry, Limavady and Enniskillen, but these can be supplemented with additional transmitters in south Down, Ballymena, Newcastle, Larne and Carnmoney.
Scottish Radio, which operates radio stations in Glasgow, Edinburgh, Dundee, Aberdeen, Ayr, Dumfries, the Borders and Inverness, had pretax profits of £5.1 million sterling on sales of £17.2 million in the year to September 1995. The half year figures to March 1996 showed pre tax profits of £3.2 million on sales of £13.3 million. Of these profits, £2.6 million came from local radio and £600,000 from the local newspaper operations.
Scottish Radio chairman Mr James Gordon said that Downtown "will continue to enjoy a high degree of autonomy in deciding how best to respond to the needs of its listeners".
Downtown chairman Mr James Donnelly said: "I am very pleased that we are joining the Scottish Radio group because it is the most natural group for us to join."
The past year has seen an increasing move by British media groups into Northern Ireland.
In June, Mirror Group Newspapers paid an estimated £7 million for the Belfast based daily, the News Letter, one of the world's oldest English language daily newspapers
