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Date: Wednesday 20 Aug 2008

LONDON (ShareCast) - European newspaper publisher Mecom saw half year operating profit slip 3% on a like-for-like basis as advertising revenue dropped 2%.

On a like-for-like basis, operating profit fell to £64m from £66m previously. Adjusted EBITDA was down 1% to £91m with a broadly flat margin of 11.8%. On a reported level though, pre-tax losses narrowed to £19.7m from £24.6m.

The acquisitions of Berliner Verlag and Wegener helped revenues surge 354% to £770m.

“The robustness of our business model has delivered a stable first half performance and assuming there is no significant adverse change in our markets we expect a similar performance in the second half,” said chairman David Montgomery.

The group said market conditions are varied in the countries in which it operates and, with the exception of Poland, it has seen more challenging economic conditions emerge in the first half.

Advertising revenue fell 2% to £401m, while circulation of its publications rose 3% to £261m. Other revenues rose 1% to £108m and digital revenue jumped 36% to £32m.

“The group's focus is to increase momentum towards a fully fledged content and consumer business generating more revenue from each customer than solely the price of a newspaper or a single advertisement,” said the group.

“With the growth of our Digital businesses our reach is now extending well beyond our traditional audience,” it added.

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