Chrysalis today underlined its determination to continue operating as a radio business and music publisher, rejecting calls to demerge or sell off one of its divisions.

The company - which owns the Heart, Galaxy and LBC radio stations, as well as a music business that is home to the likes of Morrissey and Morcheeba - is facing pressure to keep up with the consolidation sweeping the radio sector.

Some analysts believe that a radical move out of music publishing is needed to fund a major expansion in radio.

But the company said today it saw a future for both businesses under the same roof, arguing it would look for acquisitions as well as growing its radio division organically.

"These are two businesses where we think we have built very significant competitive positions," said the Chrysalis chief executive, Richard Huntingford.

"We've got a lot of advantages with these positions to work at over the coming years."

He said it was a good time for independent music publishing because the consolidation of major labels had disillusioned recording artists.

"The opportunities in the music industry for a leading independent music company like ourselves are probably the best they have ever been. All the rationalisation that's happening with the majors in terms of mergers has led to a lot of artists shying away from signing contracts with the majors."

He said Chrysalis was good at "nurturing creative talent over the long term", giving it plenty of opportunities to capitalise on new artists signing up with the company.

Digital technology was making it easier for smaller players to compete in areas such as marketing, Mr Huntingford added.

In radio Chrysalis has a battle on its hands to find properties to acquire in a market that is finally starting to consolidate.

Only yesterday Capital and GWR completed their merger to become GCap Media, while Ulster Television announced a £98m acquisition of the Wireless Group, owner of TalkSport.

And Emap is expected to take over Scottish Radio Holdings, in which it already has a 28% stake.

Chrysalis's attempts to prise stations such as Jazz FM - soon to be known as Smooth - from the Guardian Media Group were unsuccessful.

And other potentially appealing businesses may not be available: Virgin Radio, for instance, has attracted plenty of interest but its owner, SMG, insists it is not for sale.

Mr Huntingford said Virgin's FM station in London would be a "good fit" with Chrysalis, but expressed doubts about the national AM business, saying it was a "difficult proposition".

He said any acquisitions by Chrysalis would have to make strategic sense, like yesterday's deal to buy east Midlands station Century from GCap Media for £29.5m.

"We will continue to look at acquisitions but only ones that have as good a strategic fit as Century," he said.

The company is planning to build on its performance at the Heart station at London, which became the capital's number one commercial station in the first quarter of the year, overtaking Capital and Magic.

A £2m marketing campaign will begin next week to promote Heart's breakfast presenter Jamie Theakston, who has been introduced as part of a programming revamp in recent months.

Mr Huntingford said he hoped that Heart would remain London's top station, though he predicted "the race has still got a way to run".

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