In a pre-close season update United Business Media chief executive Lord Clive Hollick reported “a satisfactory performance in an exceptionally tough year with revenue and profit performance in line with our expectations.”
Continued his lordship: “The growth in market share and the significant reduction in our cost base leave us well placed for an upturn. We have a strong balance sheet to support our development and investment plans.”
British television company Channel 5, in which UBM has a 35.4% share, experienced a significant decline in advertising during the year but at the same time managed to increase its share of the advertising cake to 6.2%. Together with co-shareholder RTL, UBM has recently reinforced the channel’s bank financing - injecting a further £39 million of capital into the operation.
In the USA the group’s CMP division felt the chill of the adspend slump, not least at its high circulation (440,000) flagship Information Week where ad page volumes plummeted 40% between July and the end of October. CMP has since staged a recovery, reported Hollick.
UBM had embarked in August on a major cost-cutting initiative designed to trim £60 million from costs although this triggered exceptional costs of £14m during the first half of the fiscal.
But Hollick’s prediction of “a resilient performance for 2001,” failed to impress the professional soothsayers who inconsiderately marked-down UBM shares by 11% after the report’s publication on Friday. Debt-risk agency Standard & Poors, however, took a rosier view of UBM’s prospects and upgraded its rating from ‘negative’ to ‘stable’.
News sources: UBM website; BBC Online Business News (UK)