GCap Media, the owner of Capital 95.8 FM, is closing Capital Disney and abandoning two other radio stations in a bid to halt a 35 per cent slide in profits.

The commercial radio group said yesterday that it would cease to invest in the digital brands Core and Life and would close the Disney digital station as part of a rescue effort, after profits fell from £15 million in 2006 to £9.47 million this year. GCap announced the profit slide after revenues declined 9 per cent over the year to £200 million.

Advertising revenue fell in all categories except for business and industrial, which recorded a 2.9 per cent increase. The biggest hits were in telecoms, which dropped 31.3 per cent; food, which fell 30.2 per cent; and media and entertainment, down 22.5 per cent. GCap shares fell 15 per cent to 221p yesterday as the group slashed its final dividend.

The figures came hours after Duncan George, the former commercial director, said that he would quit the group.

Fru Hazlitt, the recently installed head of Capital Radio, denied that the radio market was in decline due to competition from the internet. Instead, she predicted a revival: “In 2001, people were saying the internet is dead. In fact, all that it needed was to be revitalised. Radio is going through a similar experience and has the platform of massive audiences on which to achieve it.”

GCap’s management team said that its recovery strategy is to “work with the best of what we have got” by offloading the noncore stations and investing £5.6 million to develop key brands. They include the One network of local stations, Capital, Classic FM, Xfm, Planet Rock and theJazz.

Ms Hazlitt said that the group would focus on the music to attract advertisers. She said: “Contemporary hit music has always been the biggest pond to fish in.”

GCap’s total audience increased from 15 to 15.2 million listeners, although listening figures fell at some stations.

Last month Johnny Vaughan regained the top slot in the coveted London breakfast show listener battle for GCap.

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