Sharewatch Focus – Emap
Emap released full year results this week which showed a normalised pre-tax profit of £184.3m (see EMAP And Channel 4 Unite In Digital Venture). Share prices duly rose during yesterday’s trading (see
The company began its 1999/2000 financial year by teaming up with Capital Radio in a consortium which bid for the Manchester digital radio licence (see Capital/EMAP Consortium Bids For Manchester Digital Radio Licence). The consortium, called CE Digital was the only bidder for this and the Birmingham licence, awarded later in the year (see RA Awards First Digital Radio Multiplex To Emap/Capital Consortium) and went on to bid for and win the London licence too (see Capital And EMAP Win First London Digital Licence).
Share prices remained at around £12-13 for the first few months of the year. In July, the company acquired the Wagadon portfolio (see EMAP Boosts Consumer Magazine Portfolio With Acquisition Of Wagadon). The move brought share prices, which had been falling off, up to £11.47 the following day (see Sharewatch).
As the summer wore on, Heat magazine, which had begun the year on a high (see Complainants Get Hot Under The Collar Over Heat Ad) seemed to be struggling (see Staff Feel The Heat At Emap Metro) and redundancies resulted. The magazine was re-designed in a bid to save falling circulation.
As prices slipped below the £10 mark in August, rumours of a takover bid by a rival company provided a small reprieve (see EMAP Shares Rise Over Anonymous Rumours Of Takeover Approaches), but some suspected a share-ramping operation.
Sharp falls in October brought Emap shares to their lowest point in the year. The falls coincided with a similar pattern at Reuters and an investigation by the stock exchange into the release of information was launched (see Sharewatch). At the end of the month shares fell to just £7.30 (see Sharewatch).
In November, as share prices recovered, Emap announced that it was selling off £28m worth of business magazines and events to Informa and closed Total Sport (see EMAP Disposes Of Business Titles For £28m). Later in the month interim results from Emap suprised the market with pre-tax profits of nearly £90m, despite having had, by its own admission ‘a bad year’ (see Emap’s Profits Beat Expectations).
Throughout the next few months Emap seemed to concentrate on developing the diversity of its portfolio, investing in its TV channel The Box (see EMAP To Give The Box £1m Promotion) and winning the Liverpool digital radio licence (see EMAP Wins Digital Radio Licence For Liverpool). Rumours of a takeover bid resurfaced in January, pushing share prices well above £15 (see Sharewatch), although this high price was not maintained for long.
Rumours of a possible teaming with Freeserve never came to fruition, but Emap has made it clear that the internet will have a strong role in its future. Just before the close of its financial year it announced the separation of its Emap Digital division and said spending until March 2001 on digital ventures would run to £75m (see EMAP Announces Digital Plans).
Emap: 01733 568 900