SLR - Ofcom Licensing

Section 105(A): Ability to maintain proposed service
2. Financial and Business Plan
• Realistic expenditure projections for the station launch that include £9,000 of nonsponsored
local promotions and advertising in Year One and £15,000 for marketing in
the pre-launch period;
• A projected operating profit in Year Three;
• Projections that require no overdraft, even if revenue shows a shortfall of 20%;
• The first dividend to be paid to shareholders after five years.
These are the policies on which the Shrewsbury Local Radio Limited business plan is based.
It is the Board’s stated intention to deliver a profit in Year Three, not to have to resort to any
form of working capital borrowings, and to pay a dividend to shareholders after five years.
The financial planning involved in Shrewsbury Local Radio’s business plan has been
rigorous, detailed and is based on reasonable assumptions.
7. Investor Strategy
The strategy of the company’s investors has been discussed and agreed upon by both the
Board and shareholders. The main points of Shrewsbury Local Radio Limited’s investor
strategy to date are:
• The focus of the enterprise is to build a successful local radio station in Shropshire for
the residents and business community of Shrewsbury and Oswestry;
• The company will remain focused on long-term growth and the integrity of its product;
• Shareholder Laser Broadcasting Limited has a long-term commitment to developing
interests in an emerging group of genuinely local radio stations;
• Investors are involved for the potential long-term returns rather than immediate shortterm
gains;
• The company should remain fully funded with no working capital borrowing
requirement;
• A shareholder agreement requires that any shares for sale are offered, in the first
instance, to existing shareholders in proportion to their existing holdings;
• Dividends will be returned to shareholders after Year Five;
• Shareholders are committed to the establishment, funding and maintenance of the
business for the full duration of the permanent licence;
• Simulcast opportunities via internet and cable streaming are acknowledged as
important ways of extending the station’s potential audience;
• Opportunities to increase the radio station’s penetration through DAB (Digital Audio
Broadcasting) in the Shropshire area will be pursued when multiplexes become
available;
• An ongoing programme of market research will ensure that the station remains
relevant and focused on the listeners and advertising community in Shrewsbury and
Oswestry at whom it is aimed.
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