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<div> <P>GWR Group plc, the commercial radio operator, today announces results for the 12 months to 30 September 1996.</P> <P>Highlights -</P> <UL> <LI>Turnover up by 63.2% to &amp;pound;52.2 million (1995: &amp;pound;32.0 million)</LI> <LI>Profit before tax increased by 54.9% to &amp;pound;8.2 million (1995: &amp;pound;5.3 million)</LI> <LI>Headline earnings per share rose 11.1% to 7.0 pence (1995: 6.3 pence)</LI> <LI>Proposed second interim dividend per share of 1.53p making a total for the year of 2.60p (1995: 2.17p) up 20% for the year</LI> <LI>Proposed merger of 83% of Classic fm for &amp;pound;71.5 million</LI> <LI>Acquisition of East Anglian Radio</LI> <LI>Agreement with Radio Wyvern</LI> <LI>Sale of Prospect for &amp;pound;17.1 million post year-end, giving a net profit of &amp;pound;3.8 million</LI> </UL> <P>Henry Meakin, chairman, commented: "1996 was another year of exceptional activity for GWR. We acquired East Anglian Radio, moved into the London market, further expanded overseas and most recently announced proposals to merge with Classic fm. The current year has started positively and we are very well positioned to deliver further value to our shareholders."</P> <P>Chairman's Statement</P> <P>The past 12 months have been amongst the most active in the company's history. With the proposed acquisition of Classic fm which is due to be completed by the end of this year, the Group will have the largest number of listeners in the commercial radio sector.</P> <P>Overseas, we have continued our expansion in Europe. In New Zealand our disappointment in not acquiring Radio New Zealand ("RNZ") has been balanced by a profitable outcome. The Prospect Group, which we acquired with a view to merging it with RNZ, has been sold to the new owners of RNZ for a profit of &amp;pound;3.8 million.</P> <P>The results for the 12 months show excellent progress. Following our decision to change the Company's accounting date the unaudited figures are:</P> <PRE>Turnover &amp;pound;52.2 m up 63.2% Headline profit before tax &amp;pound; 8.2 m up 54.9% Headline earnings per share 7.0 pence up 11.1% 2nd Interim dividend per share 1.53 pence up 20.5%</PRE> <P>The trading performance of our stations during the past year has been encouraging. In particular, the recently acquired Chiltern and Mid Anglia regions where we have seen very strong progress in both audiences and revenues are expected to continue to out-perform in 1997.</P> <P>Radio continues to be the fastest growing sector of the advertising industry and now commands a 4.5% share in total display advertising revenue. We believe that there is even more growth to be achieved in the next few years. To maximise the Group's opportunities, we have recently strengthened and reorganised our management team and continued the investment to improve further our business processes and information systems.</P> <P>The Directors have declared a second interim dividend of 1.53 pence per share, an increase of 20% over last year's final. This dividend will be paid on 12 December 1996 to all shareholders on the register at the close of business on 10 December 1996 (ex-dividend date 2 December 1996).</P> <P>Developments in the United Kingdom</P> <P>Acquisitions have dominated our activity this year in line with our strategy to develop GWR into the UK's leading radio group. In April, we led a consortium including ITN and the Daily Mail General Trust ("DMGT") to acquire London News Radio ("LNR").</P> <P>In June GWR's management relaunched the AM station as LBC on behalf of the consortium. The latest audience figures have been outstanding. Official industry research figures show an 88% increase in listening hours and a 42% increase in adult audience reach, giving the station a 5.3% share of the London market. LBC is now London's second largest commercial radio station.</P> <P>As part of our programme to reduce our Radio Authority points count to below the permitted limit, we have agreed to sell 11% of our 31% stake in LNR for &amp;pound;2 million, reducing our shareholding to 20%. This will result in a profit of approximately &amp;pound;1.5 million.</P> <P>In April, we acquired East Anglian Radio ("EAR") and fulfilled our objective of gaining coverage of virtually all of the Anglia TV region. Since its acquisition, EAR's performance has been excellent. We are delighted to have retained all the management who are now playing an integral role in helping to develop the whole of our Eastern region.</P> <P>Again in April, we took a 20% equity interest in The Local Radio Company ("TLRC"), which manages smaller radio companies, including Spire FM in Salisbury and Isle of Wight Radio.</P> <P>In August, we announced the most significant step in our recent growth the merger of GWR and Classic fm. We expect this merger to be completed in December. To acquire the balance of our ownership of Classic fm (83%) will cost &amp;pound;71.5 million, &amp;pound;44.1 million of which will be financed by the issue of new GWR shares, the remainder will be paid in cash.</P> <P>GWR played a key role in winning the national FM licence for Classic fm in 1991 and we have been closely involved in its development ever since. Classic fm is the largest commercial radio station in the United Kingdom. Its 4.6 million audience has a strong predominance of listeners in the influential ABC1 socio economic grouping which is very attractive to advertisers.</P> <P>Our detailed knowledge of the company and the market will help us to use our combined resources to seize the excellent opportunities for growth and profits that exist, particularly in the short term. We believe that with Classic fm as part of the Group we will have a flagship brand whose influence and prestige will have enormous benefits for all of our radio stations.</P> <P>In September, we announced that we had reached an agreement with Radio Wyvern Plc to acquire the whole of its issued share capital by the end of the year. Radio Wyvern, which operates in Hereford and Worcestershire, will fit very well in our existing portfolio of licences in Gloucestershire and Shropshire.</P> <P>Following the merger with Classic fm and the acquisition of Radio Wyvern, the Group will exceed the number of licences that we are allowed to control under the Broadcasting Act. As a result, we have announced an agreement to sell to DMGT 80% of Leicester Sound and 11% of LNR. By themselves these disposals do not bring us below the permitted limits and so we are now in the process of disposing of further licences.</P> <P>Developments overseas</P> <P>We have always appreciated that our growth in radio in the UK would be restricted by government regulations, and so we have worked to extend our operations overseas. We had hoped to be successful in our bid for Radio New Zealand. However, the price eventually offered was higher than we were prepared to pay.</P> <P>Earlier, in March, as part of our plans for improving the profitability of RNZ, we had acquired the Prospect Group which is the leading radio operator in Auckland and Wellington. We announced last week that we have sold Prospect to the owners of RNZ at a profit of &amp;pound;3.8 million.</P> <P>In Europe, we continue to add to our interests. In June, we acquired a 60% shareholding in Radio Edelweiss, a company based in Innsbruck broadcasting to a potential audience of around one million people in the Austrian and Italian Tyrol. Radio Edelweiss operates in a commercial radio market still in its infancy. In Bulgaria, good progress continues and the group has extended its audience outside Sofia for the first time. Inforadio in Poland, our joint venture company with the BBC World Service and with local media investors, has recently been granted its licence for a news and talk format which will reach a substantial national audience.</P> <P>The Board</P> <P>In September, we were delighted to welcome Patrick Taylor to the Board as Deputy Chief Executive and Finance Director. Having been a non-executive director for nearly three years and as Capital Radio's Finance Director for some seven years, Patrick brings to the company a considerable depth of knowledge of our industry.</P> <P>Both Eddie Blackwell and Stella Pirie who both acted so ably as, respectively, Operations Director and Finance Director, have retired from their executive roles. I am delighted that they are continuing as non-executive members of the Board.</P> <P>In July, we welcomed Peter Harris to the Board. Peter takes over from Patrick Taylor as Capital Radio's representative on our Board and has recently been appointed as Capital Radio's Finance Director.</P> <P>Two more Board appointments that I am delighted to announce today are Steve Orchard, Director of Programming, and Simon Ward, Sales &amp; Marketing Director, both of whom have been key members of GWR's management over many years.</P> <P>Following completion of the Classic fm merger, we shall also welcome to our Board Sir Peter Michael, Chairman of Classic fm, together with a representative from EMI who will be 10% shareholders in the company.</P> <P>Trading prospects</P> <P>The Group is now very well positioned to benefit from the continuing growth in commercial radio's revenues. Our management team is busy absorbing all the recent acquisitions into the Group. A lot of hard work is now in progress to rationalise our business processes and to improve our information systems.</P> <P>The opportunity to grow the profitability of the valuable licences which the Group has acquired in the past two years is substantial, both in the United Kingdom and in Europe.</P> <P>Trading conditions across the industry in the United Kingdom during the late summer experienced something of a slowdown compared to the growth rates that we have become used to in recent years. However, I am glad to report that we are again enjoying a strong period of revenue growth. We look forward to the next twelve months as a period of growing prosperity as we concentrate on incorporating our new businesses into the Group.</P> <P>Henry Meakin</P> <P>Chairman</P> <P>22 November 1996</P> <P>Review report by KPMG to GWR Group plc</P> <P>We have reviewed the interim financial information for the year ended 30 September 1996 which is the responsibility of, and has been approved by, the directors. Our responsibility is to report on the results of our review.</P> <P>Our review was carried out having regard to the bulletin "Review of interim financial information", issued by the Auditing Practices Board.</P> <P>This review consisted principally of applying analytical procedures to the underlying financial data, assessing whether accounting policies have been consistently applied, and making enquiries of group management responsible for financial and accounting matters.</P> <P>The review was substantially less in scope than an audit performed in accordance with Auditing Standards and accordingly we do not express an audit opinion on the interim financial information.</P> <P>On the basis of our review:</P> <UL> <LI>in our opinion the interim financial information has been prepared using accounting policies consistent with those adopted by GWR Group plc in its financial statements for the year ended 30 September 1995: and</LI> <LI>we are not aware of any material modifications that should be made to the interim financial information as presented.</LI> </UL> <P>CONSOLIDATED PROFIT AND LOSS ACCOUNT for the year ended 30 September 1996</P> <PRE>&amp;nbsp; Unaudited Audited 1996 1995 &amp;pound;'000 &amp;pound;'000</PRE> <PRE>Turnover 52,222 31,993</PRE> <UL> <LI>----------------- Continuing operations 42,673 31,993 Acquisitions 9,549 -</LI> <LI>-----------------</LI> </UL> <PRE>Operating expenses 44,584 26,672</PRE> <UL> <LI>----------------- Ordinary operating expenses 35,449 26,672 Acquisitions 8,103 - Abortive acquisition costs 1,032 -</LI> <LI>-----------------</LI> </UL> <PRE>Operating profit 7,638 5,321</PRE> <UL> <LI>----------------- Continuing operations 7,224 5,321 Acquisitions 1,446 - Abortive acquisition costs (1,032) -</LI> <LI>----------------- (Loss)/income from interests in associated undertakings (351) 131</LI> </UL> <PRE>Investment income 49 80 Interest payable and similar charges (142) (221) ------ ------</PRE> <P>Profit on ordinary activities</P> <PRE>before taxation Ongoing 8,226 5,311 Abortive acquisition costs (1,032) -</PRE> <UL> <LI>----------------- 7,194 5,311</LI> </UL> <PRE>Taxation 2,447 1,716</PRE> <UL> <LI>----------------- Profit for the financial year 4,747 3,595 Dividends 2,234 1,410</LI> <LI>-----------------</LI> </UL> <PRE>Retained profit for the year 2,513 2,185</PRE> <UL> <LI>-----------------</LI> </UL> <PRE>Earnings per share before abortive acquisition costs 7.0p 6.3p Earnings per share 6.0p 6.3p</PRE> <PRE>Dividend per share 2.60p 2.17p</PRE> <P>The group has no recognised gains and losses other than those included in the profits stated above and, therefore, no statement of total recognised gains and losses has been presented.</P> <P>There is no material difference between profit on the historical cost basis and that disclosed above. Accordingly, no note of historical cost profits and losses has been included.</P> <P>CONSOLIDATED BALANCE SHEET as at 30 September 1996</P> <PRE>&amp;nbsp; Unaudited Audited 1996 1995 &amp;pound;'000 &amp;pound;'000 Fixed assets Intangible assets 4,537 830 Tangible assets 14,215 9,589 Investments 3,429 2,315 ------ ------ 22,181 12,734 ------ ------ Current assets Debtors 16,487 14,365 Cash at bank and in hand 789 170 ------ ------ 17,276 14,535 Creditors: amounts falling due within one year (21,966) (14,160)</PRE> <PRE>Net current (liabilities)/assets (4,690) 375 ------ ------ Total assets less current 17,491 13,109 liabilities ------ ------</PRE> <PRE>Creditors: amounts falling due after more than one year (1,291) (1,757)</PRE> <PRE>Provisions for liabilities and (140) (170)</PRE> <PRE>charges ------ ------ Net assets 16,060 11,182 ------ ------</PRE> <PRE>Capital and reserves Called up share capital 4,294 3,365 Share premium account - 1,138 Shares to be issued - 111 Special capital reserve 369 369 Special reserve 2,562 - Revaluation reserve 1,113 1,113 Profit and loss account 7,722 5,086 ------ ------ Equity shareholders' funds 16,060 11,182 ------ ------</PRE> <P>CONSOLIDATED CASH FLOW STATEMENT for the year ended 30 September 1996</P> <PRE>&amp;nbsp; Unaudited Audited 1996 1995 &amp;pound;'000 &amp;pound;'000</PRE> <PRE>Operating activities Net cash inflow from continuing 7,088 5,342 operating activities ------- ------- Returns on investments and servicing of finance Investment income received 49 80 Interest paid (68) (128) Interest paid on finance leases (74) (81) Dividend received from associated undertaking - 16 ------- ------- Net cash outflow from returns on investment and servicing of finance (93) (113) ------- ------- Taxation UK Corporation tax paid (2,359) (854) ------- ------- Capital expenditure and financial investment Sale of intangible fixed assets 148 - Sale of tangible fixed assets 303 60 Sale of investments - 163 Purchase of tangible fixed assets (2,743) (1,932)</PRE> <PRE>Purchase of intangible fixed assets (428) (216) Purchase of fixed asset invesments - (28) ------- ------- Net cash outflow from capital expenditure and financial investment (2,720) (1,953) Acquisitions and disposals Purchase of subsidiaries - Prospect (13,364) -</PRE> <UL> <LI>Chiltern Radio - (1,309)</LI> <LI>East Anglian Radio (2,785) -</LI> <LI>Beacon Broadcasting (630) (59)</LI> <LI>Radio Edelweiss (902) -</LI> <LI>Mid Anglia Radio - (21)</LI> </UL> <PRE>Cash acquired with subsidiaries - East Anglian Radio 3,191 - - Prospect 293 - Overdraft acquired with subsidiaries - Chiltern Radio - (823) subsidiaries - Chiltern Radio Disposal of subsidiaries - Galaxy Radio 3,721 - - Isle of Wight Radio 303 - Purchase of investments in associates - London News Radio shares (198) - - London News Radio loan notes (1,172) - -Minster Sound/The Loc al (655) (279)</PRE> <PRE>Radio Company ------- ------- Net cash outflow from (12,198) (2,491) acquisitions and disposals Equity dividends paid (1,831) (997) ------- ------- Net cash outflow before use of liquid resources and financing (12,113) (1,066) ------- -------</PRE> <P>CONSOLIDATED CASH FLOW STATEMENT (continued) for the year ended 30 September 1996</P> <PRE>&amp;nbsp; Unaudited Audited 1996 1995</PRE> <PRE>&amp;nbsp; &amp;pound;'000 &amp;pound;'000</PRE> <PRE>Net cash outflow before use of liquid resources and financing (12,113) (1,066)</PRE> <UL> <LI>----- ------ Financing Issue of shares 13,242 38 Increase in short term borrowings 10,503 - Repayment of short term (10,503) - borrowings Repayment of secured loan (381) (121) Expenses of share issue (121) (249) Repayment of principal under (397) (365) finance leases ------ ------ Net cash inflow/(outflow) from financing 12,343 (697) ------ ------ Increase/(decrease) in cash for 230 (1,763) the period ------ ------</LI> </div>

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