Reuters: Hot Stocks: UPDATE 1-Cost-cutting blunts Mecom's revenue slide; shares jump

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UPDATE 1-Cost-cutting blunts Mecom's revenue slide; shares jump Apr 25th 2013, 09:59 Thu Apr 25, 2013 5:59am EDT * Expects full-year EBITDA of 50-60 mln euros * Q1 expenses down 12 pct * Shares rise as much as 9 pct (Adds analyst comments, details; updates share movement) By Abhirup Roy April 25 (Reuters) - Publishing company Mecom Group Plc said cost-cutting was easing the impact of sliding advertising and subscription revenue, sending its shares up as much as 9 percent. The company, which owns more than 250 printed titles and 200 websites, said it still expected a significant drop in 2013 core earnings, largely because of lower advertising revenue for its core Dutch operations. Mecom forecast full-year earnings before interest, tax, depreciation and amortisation (EBITDA) of 50 million euros to 60 million euros ($65 million to $78 million). The company, which publishes regional newspapers such as De Gelderlander and De Stentor in the Netherlands, reported adjusted EBITDA of 87.5 million euros last year. The forecast comes two weeks after the company said earnings would miss expectations and that it did not expect any improvement in economic conditions and consumer confidence until later this year at the earliest. "They have been able to offset any revenue reductions through cost savings and I think that's what the market is focusing on," Peel Hunt analyst Patrick Yau told Reuters. "So the company is responding well to the difficult trading environment." Mecom shares hit a high of 43.75 pence before easing back to 42 pence at 0955 GMT. Mecom, which operates in the Netherlands, Denmark and Poland, has been grappling with falling advertising rates across all its markets as the print media industry struggles to hang on to readers in the face of stiff competition from the Internet. The company has been cutting jobs and costs and selling assets to cope with the precipitous decline in the print industry. These steps helped it lower expenses by 12 percent in the first quarter. It said it is planning further restructuring in 2013 and new cost-cutting in the Netherlands and Denmark to cushion the sustained falls in revenue in these markets. "The allusion to further cost-cutting measures to protect the bottom line, I think, provides some reassurance that at the very least its not going to be worse than we thought," Canaccord Genuity analyst Simon Davies said. Mecom averaged 11 percent fewer full-time staff during the three months ended March 31, compared with the year-ago period. First-quarter EBITDA was 1.7 million euros lower than the year-ago period after accounting for the lower costs, the company said. ($1 = 0.7695 euros) (Reporting by Abhirup Roy and Abhishek Takle in Bangalore, Writing by Brenton Cordeiro; Editing by Roshni Menon) Link this Share this Digg this Email Reprints

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