Three days after my interview with City AM chief executive Jens Torpe, the company issues a brief statement announcing that the editor, David Parsley, is standing down "for family reasons".
At my meeting with the jovial Dane, there is no inkling of the turmoil beneath the surface of the free newspaper, which celebrates its second anniversary this week. His message is relentlessly positive. In two years, City AM's distribution has almost doubled from 55,000 to around 100,000 copies a day. Advertisers were initially wary, but in the first six months of the year, ad revenues doubled compared to the same period in 2006. And reader research has returned glowing verdicts.
That is not the full story, however. Torpe had claimed in previous interviews that the freesheet was on track to become profitable in its second year. But it only achieved this goal in two months out of 12.
"In the spring, we had a couple of months [March and June] where we were profitable, but the summer is not the smartest time to do a free newspaper. I'm a bit tired that the weather is like it is, I'm looking forward to the autumn," he says.
"We hope and believe that going into our third year in September and onwards during the autumn it will be in profit."
The messages are conflicting. On the debit side there is a change of editor, with news editor David Hellier standing in as acting editor until a replacement is appointed – and break even still to be achieved. On the credit side, more people are picking up a copy of the paper and liking what they see and advertisers are coming round to the concept.
Torpe, formerly chief operating officer of Metro International, the Swedish company that pioneered free newspapers (not to be confused with Associated Newspaper's Metro), set up City AM with Lawson Muncaster, with whom he had worked at Metro – and the two men share a 50 per cent stake in the title, with the other 50 per cent coming from Dutch backers.
The fact that Associated Newspapers had the Tube tied up in a deal to distribute its morning freesheet Metro, was not an obstacle. City AM hired some 200 hand distributors to give out the newspaper outside stations in the City and Canary Wharf.
If the extensive research that the company has conducted is to be believed, readers are enthusiastic. The number of hand distributors has been cut back to around 100, but in their place, the company has reached agreements to place copies in racks in more than 1,000 offices across the City, Canary Wharf, Mayfair, Paddington Basin and Chelsea Harbour, as well as airport business lounges and restaurants.
City AM has also tapped into an audience that had previously been resistant to newspapers.
"There is a new generation of people working in the City who do not read traditional newspapers," says Torpe. "Seventy per cent of people working in the City and Canary Wharf are below the age of 40. But many are already up in high positions. One of the things these people liked about City AM was the condensed news. It's easy to pick up and we try to have a high story count on each page. So you get a quick overview and you're able to prioritise the information. What we got back from the readers was 'you saved a lot of time for me, because I found the traditional newspapers too daunting'."
He insists that City AM has never tried to take on the Financial Times. Instead, with features including a gossip column called "The Capitalist", it aims to capture "the buzz of the City".
"The FT is a Colossus compared to us, it's a big global newspaper ... there's a limit to what it can cover of what goes on in the City and Canary Wharf. I would hope every edition [of City AM] reflects what went on in the City and Canary Wharf yesterday and also what will happen today."
The paper has had some good scoops, including the owner of Prêt à Manger saying that he was going to float the fast food company on the Stock Exchange, and Ford considering selling off Jaguar and Land Rover.
At the outset, advertisers were not sure what to make of City AM – whether it was a business to business, or a consumer title. Now they appear to have accepted that it performs both functions, and the freesheet is on the roster of the major national agencies. In the last year, the title has also broken into the "C-suite" – the offices of company directors, CEOs and CFOs.
While market research has revealed a high degree of penetration – 23 per cent of people interviewed on the street in the City and 21 per cent of directors read City AM – it has proved trickier to pin down an exact reader profile. In its first round of research, the average age of the reader came back as 36, but it has now climbed to 38.
Street surveys showed the average salary of a City AM reader was £50,000, but online reader panels put it at £87,000. Directors who read the title earned£205,000, on average.
Now that it has established itself as a credible presence in the market, City AM aims to grow its distribution by 2-3,000 copies a month. It expects that its final reach will be "north of 150,000 daily", but does not want to expand too rapidly to ensure that it keeps its upmarket profile. It is also launching a website, and there are plans afoot to launch City AM in New York and Paris.
Torpe says that freesheets have benefited from changing patterns of consumer behaviour. "There are fewer people out at newsagents. If half the population has stopped smoking, that's another buying opportunity lost. That's why when you come out of the Tube station and you see a newspaper, you pick it up."
As someone who began his career at Denmark's Politiken Newspaper Group, then moved into television as managing director and president of Danish TV3, and then returned to newspapers, Torpe is an evangelist for the medium.
"There is a feeling that newsprint is in terminal decline," says Mr Torpe. "I think that is so untrue. I think newsprint is in its renaissance. I see no media having the same power or impact as newspapers. There's a defeatist attitude. It's time to look up and see what's happening."