Emap says consumer magazines and radio markets weak

by Mark Banham, Brand Republic 27-Mar-07, 09:30

LONDON - Emap, the publisher of Heat and FHM magazines, is expecting to report full-year revenues down by 2% with its consumer magazines and radio business hard hit.

In a trading update issued this morning, Emap revealed that its consumer magazines in UK were suffering, with underlying figures down 2%.

It said the outlook for 2007/2008 was weak for the consumer magazine ad market while it also described circulation prospects as weak.

International consumer magazines dipped, down 6% during the year, while the business-to-business division was hit hard at the publisher, with under-performing flat growth.

The Emap radio portfolio, which includes the Magic and Kiss networks, dropped by 1% in underlying growth, with only TV income saving the group from a full strike of dropping revenue. Looking forward, Emap said the outlook for this market was also weak.

Emap's television business, which includes The Hits music channel, broadcast on Freeview and Kerrang! broadcast on the Sky platform, recorded an impressive 11% growth, providing a much-needed boost with a good outlook.

There were other bright spots. Emap said that digital growth will be up 35% on last year, generating revenues of £127m.

Emap said it was in line to deliver £20m worth of promised savings across the group, which includes consumer magazine titles, radio stations and business magazines.

The company said it was "considering options" for its radio stations in Ireland, including national radio station Today FM, Dublin-based FM 104 and Donegal station Highland, in what could net the firm an estimated £115m. Emap said that it would provide an update at its final results announcement in May.

Performance by its business-to-business titles, which includes Draper's Record and Building Magazine, was disappointing with growth flat. However, it said its development of its B2B brands online was progressing.

Reports have already suggested that the management restructure at Emap could entail as many as 400 job cuts across the group in editorial, administration and commercial operations. An estimated 30 cuts have already been made by the company's commercial arm Emap Advertising.

Tom Moloney, group chief executive, said: "Despite the widely reported challenges in some of our markets we are on track to deliver 3% revenue growth for the year. Within our consumer business we are increasing allocating resources to take advantage of the opportunities available to us on faster growth platforms, through our content, brands and reach. B2B continues to make good progress in the new environment having already felt the impact of digital.

"We believe that the actions we are taking to reshape the group will position us to deliver sustainable growth."