UBM Shares Surge On Strong Profits

The 11.4% profit growth at UBM is taken before the cost of new media initiatives which ran to £128.3 million. This leaves headline pre-tax profits after new media costs at £214.1 million. The figures are still ahead of most analysts’ expectations and UBM says that it plans to reduce online spend to £45 million during 2001.

At the end of last year UBM, then United News & Media, sold off its consumer media business and has since restructured into a business and technology information group. Commenting on the changes, chief executive Clive Hollick said: “We have transformed the group, selling our ITV, publishing and non-core B2B assets at premium prices totalling £3.2 billion and delivered our strategy to create a leading international business information group with a strong financial base for expansion. The return of £1.25 billion will allow our shareholders to participate in the tremendous value we have built in ITV over the last decade.”

Last week broker ABN Amro warned that UBM could be vulnerable to a downturn in the hi-tech publishing advertising market (see UBM Could Be Hit By Hi-Tech Ad Slow-Down, Warns ABN Amro). Hollick said that revenues at CMP, the hi-tech publishing arm, are ahead of last year, although he acknowledged the uncertain position of the US advertising market in this area. “The company has made a satisfactory start to the new year,” he added.

However, following the results, ABN Amro this afternoon reiterated its feeling that the long term fundamentals of hi-tech B2B are unattractive and has therefore stuck with a Reduce stance on the group. Headline earnings per share for 2000 were up 6.9% to 49½p.