AGM Statement

26 May 2006 10:09

SMG PLC26 May 2006 Chairman's AGM Statement - 2006 The Annual General Meeting of SMG plc ("SMG") will be held today at 12 noon, atwhich Chairman, Chris Masters, intends to make the following remarks: "I am pleased to report that SMG has continued to make good progress in thefirst few months of 2006 in developing new revenue streams and strengthening ourexisting businesses. The Group has powerful brands and we continue to accelerate our strategy ofcapitalising on their strengths and the affinity that they attract fromadvertisers and consumers. Our television stations will next week re-brand asSTV, bringing a common on-screen look and feel to complement the sharedprogramming that is now a feature of both schedules, and enabling us to pursue acohesive on-line strategy for our broadcast TV business. Pearl & Dean,traditionally a business to business brand, is now transacting directly withconsumers for the first time in its 50+ year history and Virgin Radio continuesto make good progress in exploiting its unique brand to broaden its listenerbase. This brand strength places SMG in an advantageous position to harness theadvances in digital technology and consumer uptake. The re-branding of our TVstations is a precursor to the launch, this summer, of an innovative on-linestrategy spearheading our stated aim of achieving 25% of broadcast televisionrevenues from areas other than conventional spot advertising by 2010. This willcomplement Pearl & Dean's consumer-focused website, launched in February, andwill be supplemented by the enhancement of Virgin Radio's pioneering onlinepresence later this year. We continue to focus on enhancing efficiency across the Group and ourGlasgow-based TV operations will transfer on schedule to their new studios inthe city in July, facilitating improved working practices and anindustry-leading working environment in what will be one of the most advanced TVfacilities in the world. Meanwhile the separation of Primesight and Pearl & Deaninto standalone businesses has resulted in improved focus and effectiveness. Overall, advertising markets in the first few months of 2006 have beenchallenging. Advertiser response to the World Cup is below expectations at thispoint and our TV airtime sales are in line with those of ITV1. However, theeffect of CRR (Contract Rights Renewal) means that short-term fluctuations aresmoothed out across the year. Our network productions and solutions businessescontinue to make good progress. Virgin Radio's revenue out-performance againstthe UK radio market, reported at the year-end, continues, driven by strongsponsorship and promotions activity. Primesight's revenue growth has also beenstrong in the early months of 2006 and we continue to out-perform the UK outdoormarket, while the improvement in margins we are seeking in this business isbeginning to show through. Pearl & Dean is seeing underlying revenue growth onthe back of a much-improved movie schedule, particularly as we approach thesummer months, albeit that year-on-year revenue performance has been impacted bythe loss, as previously announced, of the low margin UGC contract. As is consistently the case, SMG's revenues will be weighted towards the secondhalf of the year and, at this stage, the Group continues to perform in line withthe Board's expectations for 2006." Further enquiries: Callum SprengCorporate Affairs DirectorTel: 0141 300 3640 26 May 2006 This information is provided by RNS The company news service from the London Stock Exchange