Midlands warning hits shares

Shares in Midlands Independent Newspapers dived 24p to 123p yesterday after the regional publisher warned on profits and admitted it had failed in an attempt to buy Emap's newspaper titles, writes Patrick Tooher.

Midland said it had "recently reached an advanced stage in discussions concerning a significant proposed acquisition which will not now proceed".

Midland was beaten to the punch for the Emap titles by Johnston Press - the second time in less than a year that the company had missed out on a big acquisition in the sector. It was recently involved in a consortium that tried to buy Reed's regional titles, but they eventually went to a management buyout team.

Analysts noted the failure to buy the Reed and Emap titles meant Midland had very few other regional newspaper groups left to go for.

Midland, publisher of the Birmingham Post, the Evening Mail and the Coventry Telegraph, also warned that patchy advertising revenues and the continuing effects of newsprint price rises last year would lead to lowerthan expected profits.

The news prompted analysts to cut pre-tax profit forecasts for the year to December to pounds 15.5m from pounds 17.5m.

Shares in Midland have been dull performers since they were floated on the stock market in 1994 at 140p.