VNU's 18% fall in profits puts skids under UK media stocks

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The Independent Online

An 18 per cent decline in interim earnings and a cut in full-year estimates from VNU, a Dutch business information publisher, yesterday put the skids under UK media stocks.

VNU, which publishes a dozen trade titles based in London including Computing and Accountancy Age, said first-half profit excluding one-off items fell to 75.5m euros (£47m) from 92.5m euros. It also cut estimates for growth in its full-year earnings per share before goodwill to 5 per cent, a rise from the 10 per cent management predicted in March.

Lord Hollick's United Business Media, now largely a business-to-business publisher, fell 4.5 per cent after the release of VNU's results, though it recovered to end 1.5p lower at 556.5p. Informa, a mid-cap trade magazine group with publishing interests in the troubled telecoms sector, ended 6.5p down at 290p.

Rob van den Bergh, executive chairman of VNU, said: "In the trade journal area, things have really worsened this year." He noted that first-half US advertising sales for VNU trade titles, which include The Hollywood Reporter and Billboard, were down 25 per cent, while European ad sales had slumped 12 per cent.

Mr van den Bergh added: "That has been a hard blow for us.In Europe, we see a slight worsening in the figures from the first-half, especially in recruitment (advertising)."

VNU has been moving away from advertising-based businesses, but still failed to escape the sector's downturn. Earlier this year, it paid $2.3bn (£1.6bn) for AC Nielsen, a US market information group that monitors television audience viewing.

VNU shares closed down 2.8 euros at 33.29 euros, just above the two-year low hit in early trading.