GCap to close stations, cut costs by £9m

GCap Media, Britain's largest commercial radio company, said yesterday it aims to boost profits by £12.3 million, helped by cost-cutting measures that will save it £8.8 million.

It plans to close digital radio brands such as the Jazz and Planet Rock stations and sell its Digital One multiplex - the pipe-work of transmission technology that is the only one of its kind broadcasting commercial stations nationally in Britain.

GCap said it was targeting full-year underlying operating profit margin ranges of 12-14 per cent in the year ending March 2009 and 17-19 per cent in the following year.

The company also plans to sell its Xfm regional analogue licences in Scotland, South Wales and Manchester.

The moves were part of a strategic review by chief executive officer Fru Hazlitt unveiled two months after the business rejected a preliminary approach from privately owned Global Radio that valued it at around £313 million.

GCap, which owns stations such as London's Capital 95.8, Classic FM and Xfm, said the approach significantly undervalued the business.

Hazlitt described her strategy as radical and realistic.