Chairman’s Report 30th September 1991
The year was a difficult one for the local radio industry in general and for DevonAir.
National advertising declined by 17.5% as against the previous year but the effects of the recession were much more clearly felt in local advertising which fell by 21 percent. Sales of commercial production and other ancillary services were closely related to local advertising and slipped back by a similar amount.
At an early stage during the year the likely effects of the recession became clear and further rigorous costs pruning took place. The average number of employees fell by 16 percent as against 1990 and payroll costs were reduced by 12 percent. Despite all efforts by the board and management, the small 1990 profit, before exceptional items, was replaced by a loss of £143,112 which, after the costs of cutting back on personnel were taken into account, rose to £214,972.
The directors of DevonAir supported the view of the parent company, that, in the new industry circumstances, the company by itself was unlikely to return to adequate profitability in the foreseeable future. Negotiations were, therefore, undertaken between the Capital Radio PLC and GWR Group PLC which led to the agreement to amalgamate their interests in South Devon. Consequently both DevonAir and Plymouth Sound was sold to a new company, West Country Broadcasting Limited Company owned 50% by Capital Radio PLC and 50 percent by GWR Group PLC.
The transactions took place in June 1991 and we are confident that, together, the two stations form entirely large enough to operate in a manner promising a reasonable return on investment.
Early in year, David Cousins resigned as Managing Director and from the board of the company. I would like to place on record our thanks for his efforts since the company’s formation and indeed prior to that in securing the franchise for the territory.
Sir Ian Amory, who had been Chairman for eight years, decided to resign that office because of the increasing commitments elsewhere. We were delighted that he agreed to continue as a member of the board, bearing in mind again this immense contribution to the company in what have frequently been difficult years.
The recession is by no means ending. Nevertheless we believe that, in its new form, DevonAir will continue to offer an excellent service to the people of its franchise area and will have much greater opportunities to operate in a manner which will provide its shareholders with an adequately profitable business.
Once again I have to thank the staff for their dedication and professionalism during very difficult times. I am sure that they will continue to display these qualities during what I hope will to them be, happier and more rewarding times.
K. E. Holmes