United Business Media Financial Results: Reaction

The Daily Telegraph says that whilst chief executive Clive Hollick is keen to impress on people that UBM is a ‘focused professional media group’, its interests – from IT Week magazine, via PR Newswire, to a stake in Channel 5 – are anything but focused. “It is focused only by comparison with what it used to be before it sold its ITV interests, its money-broking businesses and its newspapers. Nobody seriously believes that United is a focused group,” says the paper’s City Comment.

The Telegraph suggests that the business is acting more in the manner of an investment trust, snapping up ‘unfashionable’ investments and disposing of them when the market becomes more favourable. “Lord Hollick was the real winner from the merger of ITV, picking the peak of the advertising market to sell Meridian and Anglia TV to the only buyer, and getting the sale underwritten for cash to boot,” it says. Hollick will continue to search out good investments, even amongst the TMT downturn in the US, and UBM has the cash to support acquisitions and debt.

The Financial Times, meanwhile, thinks that UBM’s technology trade magazines have held up well, turning in a flat, rather than negative set of figures. However, with the anticipated downturn in hi-tech and scientific ad revenues in the States, this could be the ‘lull before the storm’, it says.

Broker reaction was mixed. ABN Amro is convinced that the hi-tech publishing market in the US is unattractive and has maintained its Reduce stance. Lehman thinks there is limited visibility in this market and has reduced its target price to 900p. Credit Lyonnais and Goldman Sachs, on the other hand, are more positive.

ABN Amro: Reduce Cazenove: Hold Credit Lyonnais: Add, price target of 865p Goldman Sachs: Outperform Lehman Brothers: Market Perform, price target of 900p