Highbury House Unable To Meet Full-Year Expectations
Publishing group, Highbury House Communications, has announced that it will fail to meet expectations this year and as a result will not be paying an interim or final dividend, despite seeing a 24% jump in revenue during the first half of 2004.
The group, which predicted a 27% year-on-year growth in profits from January to June 2004, admitted this morning that the first six months of this year had proved to be challenging, with consumer markets more difficult than had been anticipated.
Revenue and adjusted operating profit were up 24% to £55.5 million and 15% to £4.5 million respectively, driven by the acquisition of Cabal and Paragon Publishing.
However, adjusted profit before tax declined from £3.3 million to £2.4 million mainly as a result of trading difficulties and additional interest costs that arose from the acquisitions, while pre-tax loss reduced slightly from £27.7 million last year to £25.7 million this year.
The announcement this morning also included the group’s intentions to sell its under-performing business-to-business arm, Highbury Business, which saw revenues fall from £9.6 million last year to £8.9 million from January to June 2004.
Chairman, Simon Neathercoat, said: “As a result of the under-performance of some of our businesses and the intention to sell Highbury Business, the board has decided to make a further impairment charge to the carrying values of some of our assets and it is possible that additional write downs may be required in the final results for 2004 depending on the conclusions of our strategic review.”
Neathercoat added, although the group’s ‘strategic review will not be completed until December we have already concluded that the strategy of focussing on consumer publishing, whilst seeking to reduce debt is fundamentally sound.’
The group now faces numerous challenges, said Neathercoat, such as sharpening the focus of the business, improving financial controls and introducing a more integrated approach to the management of the businesses, which the new board is ‘vigorously tackling’.
Chief executive, Mark Simpson, said: “We have already implemented some operational changes and initiated a comprehensive strategic and financial review. We are putting Highbury House onto a more solid platform from which to generate sustained organic growth from its core consumer publishing activities. We will continue to invest in our most productive titles and support our key assets, which are the very able people we have in our organisation.”
Highbury House Communications: www.hhc.co.uk
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