Euromoney, the glossy magazine that grew into a pounds 300m media and conference group with 44 publications and 75 separate profit centres, shocked the market yesterday with a warning that profits in the year ending this month will be down about 25 per cent on the pounds 24 m it made in 1993-94.
Its activities mirror the confidence of the international banking and investment community, which has been shaken by the weakness of the international bond and derivatives markets, the slump in emerging markets triggered by the collapse of the Mexican stock market last December, and the collapse of Barings Bank.
Padraig Fallon, the executive chairman, had warned at the half-way stage that margins were already under pressure but profits still rose 15 per cent. to pounds 10.4m. The outlook for bond markets has improved, the Japanese stock market has rallied, and the September issue of the magazine is fatter than ever, without any discounting of advertising, Richard Ensor, the managing director, said.
Turnover will still have increased when the figures are reported to the Stock Exchange on 28 November, and profits in the core businesses are expected to be little changed on last year. Profits at Raven Fox, Petroleum Economist and Asia Law & Practice have held up well and Century House is expected to break even.
But profits at AIC, the organiser of conferences, seminars and training sessions, in which Euromoney has a 75 per cent stake, have been almost wiped out, and restructuring costs of at least pounds 2m are being charged to current year profits.
Problems have been concentrated in Western Europe and, to a lesser extent, in Latin America.The board expects to hold the final dividend at 29.5p, making 43.5p for the year. But analysts had been expecting profits of up to pounds 27m, and the shares plunged 312p to 1083p, wiping 22 per cent off the overnight pounds 300m market value of the company.
Investment column, page 22