Stock exchange flotation for Virgin Radio

Scottish Media Group is to float Virgin Radio on the stock exchange.

The group says the move will allow the company to focus on its TV business, which include Scottish Television.

SMG chairman Richard Findlay said: "This is the right strategic decision for SMG, increasing our focus on TV whilst reducing debt. Virgin Radio is one of the great brand names in media with an attractive national audience, strong relationships with advertisers and a clear growth strategy."

"As a quoted company it will have the best management and capital structure to support its future growth, and will make for an attractive pure radio investment opportunity," he added.

Analysts have valued Virgin Radio at around £85 million, which SMG have indicated would clear the company's debt.

SMG's TV revenues fell 8% across 2006 to £125.6 million, while Virgin Radio outperformed the UK radio market with its turnover down just 3% to £21.7 million.

The group also announced a 50% fall in pre-tax profits to £10 million for 2006.

Chief executive Rob Woodward added that the company wants its production businesses, which make shows like Taggart and Rebus, to create more content for ITV and other broadcasters in the future.

SMG is also selling its cinema advertising outfit Pearl & Dean, with a sale of outdoor advertising firm Primesight on the cards "when market conditions were better."