Ashford Local Radio - Ofcom Licensing

Financial Projections
The applicant should provide financial projections on an annual basis for the licence.The projections must include:
This section must include a full listing of the underlying assumptions on which the financial projections are based, relating
such assumptions clearly to other parts of the application (e.g. proposed format, extent of coverage area).
The period covered is at the discretion of the applicant, but should be justified.The forecasts should be supplied on an Excel
spreadsheet or similar, with any accompanying guidance notes.They may be submitted in confidence.
Assumptions
The following are the assumptions on which the projections have been based:
1. An adult population of 72,945 in year one growing by 2,000 per year until 2009.
2. A broad appeal format producing a 'lifestyle' station for the people of Ashford.
3. A weekly reach in year one of 16.5% growing to 18.5% by year three
4. Average hours of eight per person in the first year growing to nine per person by year three.
5. An average monthly advertising spend of £900 per month in year one growing to £1061.85 by year three.
However advertisers can be on air for as little as £120 per week
6. An advertising minutage policy of nine minutes per hour between 07.00-1900 Monday to Friday and 07.00-14.00
Saturdays and Sundays.
7. 55% of airtime will be sold in year one rising to 70% in year three.
8. The audience and average advertising spend will start to level after year three.
(i) Profit and loss accounts
ALR has taken a view that five-year projects are necessary to show the advantages in the population growth of Ashford
and to give a clear and full picture of the radio station’s potential profitability. All figures are based on a start date of
October 2005 although this could be as early as June 2005.
See Appendix 5.
(ii) Balance sheets
See Appendix 6.
(iii) Cash-flow forecasts
See Appendix 7.
Please note that all figures are based on raising £300,000 although the option is available to increase this to £350,000.
The cashflow assumptions are based on 50% of sales invoices being paid immediately and 50% after 30 days. ALR believes
it is good business practice to look for pre paid campaigns although established clients will be given 30 days credit.
www.ashfordlocalradio.com
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