UBM Shares Fall As Profits Are Halved By Hi-Tech Ad Slowdown

UBM posted a pre-tax loss of £541.2 million, compared to a £2.1 billion profit the previous year. Operating profit fell by 49.8% to £81.1 million. The results are pretty much in line with lowered expectations released by the group in December (see UBM Says Profits Will Be As Expected).

On the positive side, Hollick said that UBM has grown its market shares and instigated substantial cost base savings for 2002 of £110 million.

Hi-tech ad slump hits CMP Media Advertising volumes at UBM’s hi-tech publishing business, CMP Media, fell by 26% during 2001, with the rate of decline increasing throughout the year (see Hi-Tech Advertising Deterioration Continues, Hammering CMP Media’s Profits). In the last five months CMP’s revenues have been running at about 40% below the 2000 levels with no sign of an improvement, UBM said this morning.

The business-to-business information technology market as a whole decreased by 45.1% in advertising page volumes in the month of January, compared to CMP Media’s High Tech publications which recorded a 36.0% decrease.

Positive growth in this sector is not expected by ABN Amro until September 2002. As a result the full year is forecast to see hi-tech ad revenues down by 13%.

Market research UBM’s market research revenues rose slightly by 3.2%, whilst underlying profits fell by 3.7%, mainly as a result of a H2 weakness in the UK market. The US market research business had a much better year, with underlying profit up 10.3%, according to ABN.

ABN Amro: Reduce

Shares in United Business Media fell heavily in the morning’s trading following the release of these figures and were down 41½p (6.9%) at 558½p by 11.00am.