The headline Record revenues at Euromoney despite credit crunch might be thought to mean that Private Frazer should pack his bags and head off back to the lovely Isle of Barra because magazine publishing is safe. But before we shout three cheers let’s take a wee glance at the small print.
A few less-than-rosy points:
- the company’s advertising revenues fell across most titles
- growth in advertising and sponsorship revenues has slowed
- There was a 4 per cent decline in revenues in the UK and US
Revenue and profit growth came from paid subscriptions and (particularly) from non-publishing sectors such as training and seminars.
So perhaps only two cheers then – if you’re a controlled-circulation, advertising driven, ink-on-paper, magazine publisher, there’s no comfort to be derived from the Euromoney performance.
There’s a little more on the Hemscott page
The group’s business mix has changed following its programme of acquisitions and other strategic investment. Advertising has fallen from 34% of revenues to just 18%. Training, conferences and seminars now make up 40% of overall revenues as the group moves away from its financial publishing background.
[Euromoney] Shares … have had a disastrous run since the middle of last year, falling from highs of 680p in May as the market slashed valuations on financial publishing groups. Euromoney Instititional Investor now trades on just 10.9x earnings, compared to 12.7x for its sector. Its dividend yield is now 5.52%. The market is clearly expecting worse news from the group. Margins are steady for the time being, but almost 50% of its revenues come from the US where corporate earnings news is likely to worsen in the short-term. In short, the shares are cheap but it is a brave bet with the current economic backdrop.
So perhaps we should only have the one cheer (even though that’s one more than most of the B2B boys can manager at present).