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Newcap posts steady quarter

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Newfoundland Capital Corp
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Financial/Mergers & Acquisitions
DARTMOUTH, N.S. - Newfoundland Capital Corporation, announced today that it continues to enjoy steady revenue growth.

In the third quarter, ended September 30, 2004, revenue grew by 5% to $15.9 million and net income was jumped 23% to $1.6 million compared to same period last year.

For the full nine months of the year, revenue was $46.8 million, 6% better than in 2003. Net income was $6.7 million, compared to last year's $3.8 million.

"Our business strategy is centered around continuous innovation and improvement of sales methods in all our markets," said Rob Steele, president and CEO, in a release. "We have been active in the quarter improving revenue, gaining operational efficiencies and pursuing new opportunities to expand our radio network."

The release also noted NCC's growth strategy, expanding its operations with an application for a new FM license in Kamloops, British Columbia, and this month, the CRTC will review the company's applications to acquire a radio station in Thunder Bay, Ont. and TV and radio stations in Lloydminster, Alta.

As well, the company is one of several in the bidding for a new alternative rock station in Ottawa. Hearings will be held in December.

"Our launch of six new FM services in Alberta began in Hinton in July and was followed in September with the new FM station in Cold Lake, Alberta (CJXK-FM), formerly AM station CJCM. The Classic Rock format received an immediate positive response from advertisers and is a good leading indicator of how the remaining launches will be welcomed," reads the Newcap press release.

"We remain confident heading into the fall ratings period and look forward to a favourable fourth quarter.

"The company's positive revenue growth is expected to continue into the final quarter of this year. National advertising sales growth has slowed across Canada. Fortunately, NCC's asset base has a lower exposure to national sales than other radio companies with local retail sales efforts contributing significantly to revenue improvements. The company's Ottawa station, Hot 89.9, continues to impress and will positively impact sales in this rating sensitive market. The Alberta group of assets should continue to improve. Operating efficiencies and FM launches and conversions combined with an above-average economic growth rate will contribute to performance next quarter and in 2005."

As for the lawsuit launched by former president Bob Templeton against the company for wrongful dismissal, Newcap had this to say: "The company has received a statement of claim from a former executive. It is the company's opinion that the severance package provided was fair and therefore the claim is without merit. The company intends to vigorously defend this position and any liability that may arise from this claim is not determinable at this time."
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