Emap shares nosedive on H1 revenue concerns |
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Fri, 14 Jul 2006 11:50
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LONDON - Shares in media group Emap took a nosedive as the company said in a trading update that revenues were broadly flat for the first half of the year. The decline was blames on the low demand for car and men's magazines.
"The trends that are now emerging make us more cautious about the prospects for underlying revenue, which may be marginally down in the first half. For the year as a whole, underlying revenue is likely to be broadly flat, as comparatives for the second half are less demanding," said a statement issued by Emap chairman Adam Broadbent. In May Emap had announced that the revenues were similar to last year's growth of 8 percent. "There has been good growth in circulation from most weekly titles, but we are seeing an increase in the rate of decline in other titles, particularly men's and automotive," Broadbent clarified.
But Emap, which owns men's magazine FHM said it would still go ahead with investing £25 million for new product development. Emap is to sell its French division for €550 million (£380 million). That deal is set to be completed in September. Tom Moloney, Emap chief executive, said that as owners of FHM magazine, the company were very happy, "There is clearly is a structural evolution going on in many media markets because people have got more choices," he said.
Analysts say that Emap's performance is going to be flat this year. "The assumption Emap would be able to continuously outperform in an environment that looks awful was probably too much," said Anthony de Larrinaga, an analyst at SG Securities. “We need to have greater focus in the strategy."
Emap shares plunged 125 to 712p in early trading.
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