Wave 105, based in Southampton, is the regional radio licence holder for the south of England. The station, which provides adult contemporary music plus lifestyle and entertainment news, has seen good audience growth since it was launched three years ago. Leveraging SRH’s expertise in managing local radio stations, Wave has the potential to develop further.

Financially, Wave 105 generated turnover of £1.9m for the 15 months to 31 December 2000. For the same period the company incurred an operating loss of £840,000. At December 2000 the net assets of Wave were £138,000. Advertising revenues for the nine months to September 2001 are up by 63% on the corresponding revenues for the previous year, and the station is expected to make only a small operating loss in respect of the year 2001.

SRH has also agreed to purchase, for £1m in cash, 25% of the issued share capital of Kingdom, which provides a commercial radio service to Fife, lying between SRH’s market-leading radio stations Radio Forth (based in Edinburgh) and Radio Tay (based in Dundee). In its short history Kingdom has developed a strong franchise and this acquisition further enhances SRH’s market-leading positions in Scotland.

The cash consideration of £19m payable by SRH will be met from existing SRH cash balances. As at 30 September 2001 SRH had no bank borrowings.

Both transactions are subject to approval by shareholders of TWG at an extraordinary general meeting to be held in November 2001. However, shareholders of TWG representing in aggregate more than 56% of the voting ordinary share capital of TWG have already irrevocably committed to vote in favour of the transactions.

Commenting on the proposed acquisitions, SRH Chief Executive Richard Findlay, said:

Wave 105 is one of the most desirable of the UK regional licences. It covers the valuable south of England market, which is a rich mixture of wealthy rural, coastal towns and significant cities. It is an area historically popular with advertisers, and is therefore well placed to benefit from any lift in the advertising market.

I am delighted that our healthy financial position allows us to make strategic acquisitions such as these to add to our already strong position in the local radio market.

The audience performance of Wave 105 has steadily grown over the last three years and we will work hard with the management and staff to improve this further, and to better sales and profit performance in line with our other stations.

Kingdom FM has particular appeal, lying between our Edinburgh and Dundee based stations; and has secured notable audience popularity and operating profitability, which we can assist in developing further.

These transactions significantly increase the size of SRH’s radio division, which remains the largest part of our successful group.