Milestone sells Passion 107.9
Milestone Group have now disposed of all of the Company’s radio interests – with the selling of Passion 107.9 to Absolute Radio. It comes following a strategic review of its radio assets with the disposal of the entire issued share capital of Passion, free of intra group loans, to Absolute Radio International Limited for a cash consideration of ?300,000.
Passion is a youth targeted local radio station operating in the Oxford area. In the financial year ended 30 September 2005, Passion reported losses of ?284,000 on sales of ?178,000.
Milestone Chief Executive, Andy Craig, said:
‘In the past four months, Milestone has successfully disposed of its majority shareholdings in three analogue radio stations as well as the whole of Passion for a total consideration, in aggregate, of approximately ?2.3 million. The Board is pleased to have been able to achieve these valuations on small radio stations at a time when the commercial radio industry as a whole is widely acknowledged to be depressed.
‘Passion has been a wholly owned subsidiary of Milestone since the Company’s admission to AIM in July 2003. Under the Milestone management team, the station has grown its official RAJAR audience figures from total hours of 22,000 and a market share of 0.4% (Q1, 2003) to total hours of 119,000 and a market share of 2.3% (Q1, 2006). Despite this progress, the Board realistically assessed that further audience and revenue growth would require significant additional investment at a time when the radio advertising outlook remains uncertain.
‘Having successfully disposed of all of the company’s radio interests, the Board intends to appraise the continuing operations in publishing and television with a view to exploring all opportunities to maximise value for shareholders.’
Milestone has agreed to acquire ?25,000 of advertising airtime with Passion over the next 24 months in order to continue to cross promote its local media interests in Oxfordshire. Milestone has also agreed to continue to provide a limited number of head office administrative functions to Passion, without charge, for a maximum period of four months.
The sale of Passion represents a non-cash loss of approximately ?450,000 to the Company in respect of a write down of unamortised good will. The proceeds, which have been received in full, will be used for the general working capital purposes of the Company.
Absolute Radio International invests in, operates and provides consultancy services to international music radio stations in select markets across the world. Recent UK radio activity for the company includes selling their stake in Juice FM, Liverpool to UTV Radio.