Shares in GCap Media, the UK's biggest commercial radio broadcaster, fell nearly 6 per cent after it said it is still suffering from a difficult radio advertising market and reported a plunge in profits and revenues.

It said it will close Capital Disney and cease investing in Core and Life in order to focus on Capital 95.8 FM, to try to combat the slide.

However, the owner of Capital Radio and Classic FM added that it had stabilised audience figures.

Shares dropped 15p, to 243.5p after the company said profits in the year to March 31 were down 35 per cent to £14.4 million. GCap blamed the advertising market and a reduction in the number of ads it plays on Capital Radio.

The figure tops consensus profit forecasts for £13.9 million, and comes in below the £22.2 million profit figure recorded last time.

“The market remains difficult to predict,” said Ralph Bernard, chief executive, “but we have seen an improving trend in advertising revenue performance, and we outperformed the market in the last quarter of the financial year.”

Total sales were down 9 per cent at £200.1 million during the period, with like for like sales down 7 per cent to £193 million, after stripping out the contribution from the Century radio stations which the company sold in October last year.

GCap, which has been losing market share to the BBC in London and suffering from the shift to online advertising, said it would pay a final dividend of 1.5p, taking the total for the year to 4.6p, down from the 9.25p paid out to shareholders last year.

GCap said it had also increased total cost savings to £35 million, after identifying an additional £5.5 million in savings for next year.

The company added that total revenues for April and May 2007 would be down 2 per cent and down 1 per cent, respectively year-on-year on a like-for-like basis.

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