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Emap cautious about revenue

At today’s Annual General Meeting for Emap, the Chairman Adam Broadbent warns that he expects half-year revenue to fall slightly and full-year revenue to be flat due to difficult trading conditions. However, in the radio sector Emap expects to continue to outperform the UK radio market due to their strong local brands and national reach.

“Trading in the first two months of the financial year was in line with our expectations, but 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”

The statement in full is below:

?Technology driven structural evolution and difficult trading conditions are combining to create a period of change and volatility in many of our markets. We believe that Emap is well positioned due to our brands, closeness to our markets and creative talent to take advantage of these conditions. Our strategy is to focus resources on market-leading brands and to reposition the Group to access faster growth platforms.

Over the last 12 months we have made significant progress against this plan which has enabled us to perform strongly in our markets. We have invested a record level in launches, agreed the sale of Emap France and invested ?480 million in acquisitions, including SRH and WGSN, all of which have helped reshape and strengthen the Group. We plan to increase investment in new product development in our continuing businesses to ?25 million, including funding more digital innovation. We will also continue to invest in acquisitions, primarily in B2B.

Trading in the first two months of the financial year was in line with our expectations, but 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. Revenue from our continuing businesses will benefit from acquisitions and launches. As trading conditions are likely to remain difficult, we will manage our operating cost base accordingly.

In UK consumer magazines, we expect that our next ABC performance will see us maintaining our competitive position. 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. We had a good start to the year in UK consumer magazine advertising but current booking levels indicate a softening of the market.

In radio advertising, we have also seen a good start to the year followed by a weakening outlook. Over the full year, we expect to continue to outperform the UK radio market due to our strong local brands and national reach.

In B2B, excluding public sector recruitment, which has declined more rapidly than anticipated, we are seeing a good performance. Events and information businesses continue to deliver strong underlying growth and our recent acquisitions, in particular WGSN, continue to perform ahead of plan.

We have agreed to sell Emap France to Arnoldo Mondadori Editore S.p.A. for approximately ?550 million. The transaction is expected to complete in the first half of this financial year, after which we will return ?285 million of the sale proceeds to shareholders.

As previously announced, I will be stepping down from the position of Chairman at the conclusion of the AGM and Alun Cathcart, currently Deputy Chairman, will succeed me.?

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