Newspaper publisher plans to sell some operations and has received ‘expressions of interest’ over its Danish division
Troubled pan-European newspaper publisher Mecom has reported a 17% year-on-year decline in advertising revenues in the final quarter of 2012, and revealed it is in discussions to sell its Danish and Polish operations.
The London stock market-listed company, which was founded by former Mirror Group chief executive David Montgomery, said that the advertising decline was at least a slight improvement on the 20% fall reported in the third quarter last year.
Mecom, which ousted chief executive Tom Toumazis last July after less than a year, gave an update to shareholders on a strategic review of the business in a pre-close statement on Friday, ahead of reporting final results for 2012.
The publisher said that it has received “expressions of interest” from buyers looking at acquiring Mecom’s entire Danish newspaper operation. “[Mecom] will invite a small number of potential buyers to conduct due diligence shortly,” the company added.
Mecom said that it has also entered into exclusive discussions with one buyer to offload its Polish operation. However, it is still struggling to find a buyer for its flagship Dutch business, which accounts for almost 60% of group revenues and more than 80% of profits, saying that offers to date have “not been acceptable”.
Mecom said it is examining a number of offers for specific parts of the Dutch business, including some of its standalone digital operations.
The company said that it expects 2012 earnings before, interest, tax, depreciation and amortisation to be about €89m (£73m). Net debt stands at €130m, a gearing of about 1.5 times earnings.
Stephen Davidson, executive chairman of Mecom, said: “During a period of sustained economic pressure and notwithstanding the additional demands of the strategic review processes, our people remain committed to the improvement and modernisation of our products and businesses.
“In 2013 we expect further benefits to come from restructuring initiatives and the launch of new subscription packages that provide our readers different and innovative ways to access our content.”