Chairman’s Report 30th September 1986
Although these accounts referred to events which took place in 1986, they are, of course, completely overshadowed by the recent offer from Capital Radio to buy the company. As you will have seen in the offer documents, the board is of the opinion that acceptance of the offer the is in the best interests of the company as a whole and is therefore recommending it. One of their reasons is that Capital Radio is very likely to be more effective in selling the national advertising than our agents have been up to now. The offer is subject to approval by the Independent Broadcasting Authority.
The amount of national sales and we have attracted has now fallen for three successive years and it is therefore to the great credit of our local sales team that their figures have continued to increase. The greatest improvement, however, has come from the initiative I mentioned briefly last air that David Cousins has worked on so hard, to obtain income from activities which are separate but allied to our mainstream selling of advertising time. We acted as the promotional company for the hugely successful Exeter Air Show. We conducted market research evaluating the effectiveness of the radio medium for major London clients and we developed several major sponsorship opportunities. Income from all these sources increase by over 60 percent to £128,000 from which was a major factor in the total increase in turnover to £731,000 from £686,000 last year.
Costs, however, continued to decline. We had one a bit of luck during the air when the IBA mercifully shaved 26 percent off the rent and we pay for our transmitters (although most of the stations that started to broadcast after us had 32 percent cut from their rent) but generally the pressure was upward. Employment rates are for the most part negotiated nationally and we therefore had little control of them. Other costs increased by a disappointingly large proportion and steps are continuing to be taken to ensure that these are contained as far as possible.
During the year our broadcasting continued to be of consistently high quality. The hours for which each of our audience listens continues to grow and we remain a most popular entertainment medium. Our reputation for education is growing apace and some of Tim Arnold’s recent work has been nationally praised. Our professionalism is high and I am grateful to everyone who was contributed so well to producing such popular output. Our standing in the community has again been proved by another record achievement by the DevonCare appea; this year almost £25,000 was raised which will go towards a further two minibuses to help provide transport for the handicapped in our area. This is an enormously generous response from our very loyal audience.
The radio industry as a whole is about to undergo substantial change. The government’s discussion paper on the future of the industry foresees less regulation, more stations both big and small, and much greater choice for the listener. Already regional groupings are beginning to form, which may, in my view, in entirely defeat the purpose of local radio, but the next year or two will result in a great deal of uncertainty. Nothing can happen until after the next election, by which time something entirely different from the current green paper may become the policy of the moment. If our association with Capital Radio proceeds, I have every confidence that the future of DevoAir will be exciting, independent and local.
Ian Amory