UBM Could Be Hit By Hi-Tech Ad Slow-Down, Warns ABN Amro

Broker ABN Amro has this morning downgraded its earnings estimates for United Business Media (UBM) by 10%, ahead of an expected advertising slow-down in the hi-tech publishing market. UBM was created following United News & Media’s (UNM) disposal of its consumer media assets at the end of last year. Part of this disposal included the sale of its ITV businesses to Granada and Express Newspapers to Northern & Shell.

The restructuring of UBM has transformed it into a publishing group focusing on hi-tech publications, news distribution and market research (see United News And Media Predicts Profits In Line With Expectations, Confirms Name Change). ABN Amro says that the outlook for US hi-tech advertising has weakened significantly over the last few months.

As more than 80% of UBM’s profits come from the US market and 67% of group revenues are drawn from advertising, the company is particularly exposed to a downturn in this market. As a result, ABN has a Reduce recommendation for UBM. Despite this, Cazenove has a Buy rating on the group.

At 1:30pm today shares were down 7p at 772½p.

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