CLASSIC FM owner GWR highlighted the weak state of the radio advertising market yesterday after revenues fell sharply.

The group said the caution of advertisers pushed sales last month down by 8.7 per on a year earlier, with the figure for this month expected to show a 6.6 per cent fall.

GWR recently announced plans to merge with rival the Capital Radio group, which owns North-East station Century FM, as well as XFM and Capital Radio in London.

In the six months to September 30, turnover from continuing operations rose by 3.4 per cent to £61.3m and helped profits before exceptional items improve by 12 per cent to £6.9m.

Executive chairman Ralph Bernard said the improvement had been achieved despite a toughening in trading conditions in August and September.

He said: "During this period, the radio advertising market has been increasingly competitive, with consumer spending showing signs of slowing down and mounting audience pressure from BBC radio."

The group's Local Radio Group division increased advertising revenues in the six month period by 1.6 per cent, despite strong comparisons with a year earlier and moves by the BBC to target commercial radio audiences.