Source and entire item from SMH

Austereo, the owner of the 2Day and the Triple M radio networks, has forecast a slowdown of radio advertising growth rates, but reckons the industry will be more protected than other media sectors from the global fallout of a US recession.

Advertising spending in the metropolitan radio market may rise between 2 and 4 per cent in the June half, easing from 7.9 per cent growth in the six months through December and 7.1 per cent in the June half last year, the broadcaster said when it posted first-half results yesterday.

But its chairman, Peter Harvie, dismissed analyst suggestions that the company could be one of the media stocks hardest hit if international advertisers pulled back their spending in a downturn. Alice Bennett, an analyst at Merrill Lynch, warned last month that Austereo and Network Ten were especially vulnerable as they got almost all their revenue from ad dollars.

"There is no doubt that radio generally is somewhat protected in these sorts of circumstances," Mr Harvie said. "The medium is quite ideally suited to less than sunny days."

Its reliance on local advertising, broad audience reach and low costs would help shield radio from the effects of a global downturn, he said. "If you look at our top 20 clients, only five of those clients are multinationals."

Mr Harvie said the company had a "fair" start in January, and was on track to beat last year's second-half and full-year results.

His assurances were not enough to prevent a sell-down of Austereo shares, with some investors opting to exit the stock after first-half earnings fell short of expectations. The stock closed 11 cents lower at $2, taking its declines since the start of the year to almost 17 per cent.

Austereo's net income rose 3.5 per cent to $27.8 million in the first half, driven by an 8.7 per cent sales increase as the company raised advertising rates and profited from its ratings lead in Sydney and Melbourne.

The average of five analyst forecasts was for profit of $29.3 million. The broadcaster will pay an interim dividend of 4c a share, up from 3.8c last year.