UBM Cuts Online Spend During Hi-Tech Advertising Slowdown
United Business Media (UBM) has cut its online investment for the current year from the planned £45 million to no more than £30 million. It blames the ‘current market conditions’ for the investment cuts, notably the downturn in high-tech advertising in the US.
Chairman Ronald Hampel told the company’s AGM that there has been a ‘robust performance’ in the period to the end of April, despite ‘challenging trade conditions’ in North America. He said that CMP’s share of the US high tech publications market continued to strengthen with a 30% market share being recorded in March.
Nevertheless advertising volumes at CMP were down 9% in March, according to ABN Amro. The broker has cut its advertising forecasts for the year at CMP by 15% and its earnings before tax and interest by 17%.
Whilst UBM stock is trading at a lower ratio to earnings than its publishing group peers, the tougher conditions in the hi-tech advertising market justify this, says ABN.
Essentially, the message from UBM is that cost cutting is necessary to offset the impact of the hi-tech advertising downturn.
UBM shares were up 7p at 732p this morning, after closing down 3p at 725p following the AGM yesterday.
ABN Amro: Reduce Teather & Greenwood: Buy Morgan Stanley Dean Witter: Outperform
