Moloney seen as safe pair of hands at Emap by City

by Claire Billings,, Brand Republic 09-Jan-03, 12:15

LONDON - The appointment of Tom Moloney as chief executive of Emap this morning is being viewed as the obvious and safe choice for the Heat- and FHM-owning UK media group by City analysts.

The appointment is expected to be welcomed by investors, whose faith in the company had been badly shaken when the company overpaid for US publisher Petersen and sold it a year later at a massive loss under former chief executive Kevin Hand. Despite this, Emap shares fell this morning dropping 2.25% or 17.5p to 737.5p, but this fall is not seen as a reflection on his appointment.

Retired chairman Miller, who returned as chief executive to sort out the company and boost its collapsed share price, oversaw the task of appointing a successor. However, this took longer than expected and may have been to allow Moloney to have a go at running the company in his current position of chief operating officer.

Richard Hitchcock, media analyst at Numis, said: "[Emap's] been looking around for a long time, but [Moloney's] probably been given a pretty free reign to run the business. Miller has probably been acting as more of an executive director and allowing Moloney to prove himself."

Moloney is not expected to make any radical moves initially, but instead is expected to focus on keeping the company on its current recovery track.

Simon Lapthorne, media analyst at OM Securities, said: "His first priority is to make what Emap has got continue to work well. There are no obvious strategic moves planned."

Radio is viewed as the next area of growth along, and investors are expected to be looking for the company to turn round its fortunes where it has trailed its competitors in this sector.

According to Hitchcock: "The radio side of the business has underperformed some of the other major players in the industry such as Chrysalis, which has managed to weather the ad recession. [Chrysalis] has delivered double-digit growth, against Emap, which was down 6% in the first six months of the year."

Emap has indicated that it will reignite its interest in the business-to-business operations and continue its expansion in Europe. It is also expected to make acqusitions in radio.

In a conference call this morning, Moloney said: "Emap is on track and well positioned to capitalise on its future plans and ambitions."

However, he was cautious about the coming 12 months. "We approach 2003 with a lot of caution, but we think Emap is well placed to cope with what we think will be a difficult year for the economy."

Current consensus forecasts, across 20 UK analysts for the year to March 2003, predict pre-tax profits of £169m, earnings of 47p a share and revenues of £960m, according to Lapthorne.

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