One of Australia’s most astute businessmen, Harvey Norman boss, Gerry Harvey, has purchased a 9% stake in the loss making WorldAudio network for one and a half million dollars.

Shares in WorldAudio have risen 67 percent since the announcement. The company informed radioinfo…

WorldAudio Limited today announced that a placement of 10,000,000 (ten million) ordinary new shares at 15 cents per share was made to Mr. Gerald Harvey.

The placement will raise $1.5 million dollars before costs.

The Company intends to apply these funds to working capital, the completion of the roll out infrastructure and the commercialisation its national radio network – Radio 2.

The directors are pleased to welcome Mr. Harvey as a significant shareholder in the Company.

According to a report in the Financial Review, Mr Harvey had never heard of WorldAudio, before he was given a presentation by chief executive, Andrew Thompson. “After the presentation, I thought it sounded good,” Mr Harvey told the AFR, “Yes it’s a bit of a gamble, but I’d rather [buy WorldAudio shares] than put it on a horse”.

Many in radio, who’ve followed WorldAudio’s fortunes since its inception in 2001, might have suggested the horse a better bet. WorldAudio lost $8.6 million last financial year and has warned shareholders that losses for the half to December 2003 would be 20% higher than for the same period last year.

Mr Harvey said he was attracted by the fact that the potential audience of WorldAudio’s 15 station network was around 12 million. Yet, most pundits agree that the actual audience is miniscule. Even Mr Thompson admits he does not know the number of listeners.

Part of the reason for the low audience has to do with the fact that WorldAudio’s licenses put them in the highest end of the AM band which offers poorer reception in most instances than commercial operators lower down. Many radios can’t even pick up that end.

However, that may change as Radio 2 is listed as one of Foxtel’s 27 audio channels on its new digital service that is being aggressively marketed to Foxtel’s one million plus subscribers. With the cost of conversion just $49.95 and subscription prices staying virtually the same, the take-up of this greatly enhanced service is likely to be rapid. If it is, then WorldAudio will have a real potential to be heard by a much larger audience in crisp clear digital sound with all the enhancements by about April or May this year.

Although commercial radio is currently testing DAB technology in Sydney and Melbourne it is unlikely that it will be available for public consumption within five years, if at all.

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