Shares in Mecom plummeted nearly 48 per cent yesterday after the beleaguered European newspaper publisher admitted profits would fall short because of a "significant deterioration" in advertising.
Tom Toumazis, the chief executive, blamed a 17 per cent slump in ad revenues in the Netherlands in the second quarter, against a 12 per cent drop in the first three months as the eurozone crisis escalated.
Mr Toumazis downgraded his expectations for Mecom's full-year profits to below €95m (£77m) and warned that he saw "no reason" for an upturn, especially in the Netherlands. He added that his advertising forecast for 2013 and 2014 "needs to be reassessed".
The shares tumbled 70p to 76p, reducing Mecom's market value by £85m to just £92m. Mecom's debt pile of €283m is now more than double its market capitalisation. The company said it was on track to deliver €70m of cost savings announced in January.
Mecom owns dozens of titles including the Dutch paper Limburgs Dagblad and the tabloid BT in Denmark, but is selling its Norwegian operation Edda Media.
Analysts at the broker Numis Securities pointed out that Mecom's ratio of net debt to operating profits before exceptionals should still be comfortably within its bank loan covenants. The loan criteria demand that debt should not be more than three times underlying profits.
Mr Toumazis, who took the helm last year after the former Mirror Group boss David Montgomery was ousted, used to be a senior executive at the Big Brother TV production company Endemol but has little experience of newspapers.