CAPITAL Radio gave its backing to presenter Johnny Vaughan yesterday as it sounded the latest warning about the health of the advertising market.

The group, which recently announced plans to merge with Classic FM owner GWR, said the presenter's Capital FM breakfast show in London continued to appeal to its key target audience, despite falling listening figures.

The comments came as the group saw a slowdown in spending by key advertisers at the end of a challenging year for commercial radio, in which group underlying profits rose four per cent to £23.7m.

Recent industry figures showed Vaughan lost 144,000 listeners in the three months to September, in addition to the 187,000 he lost the previous quarter after taking over from veteran presenter Chris Tarrant. This brought the number of listeners to 1.04 million.