Emap profits hit by rival French TV magazines

Shares in Emap, the radio and magazines group, plummeted 11 per cent after the company revealed that its French TV listings publications had been severely hit by new competitor titles.

Shares in Emap, the radio and magazines group, plummeted 11 per cent after the company revealed that its French TV listings publications had been severely hit by new competitor titles.

The City, taken by surprise by the news from France, also reacted negatively to the comments from Emap suggesting that the UK radio market had "softened" in April and May. Although investors had been aware of the launch of rival magazines in the French listings sector, yesterday's full-year results from Emap showed the problem to be more serious than was previously thought.

Some 10 per cent of Emap group revenues come from its two TV weeklies in France - Tele Star and Tele Poche. In January this year, Bertelsmann, the German media giant, launched a fortnightly title, Tele 2 Semaines, with a cover price of €1 - roughly the same as consumers pay for the Emap weeklies. More recently, Bertelsmann has launched a second fortnightly. The two Bertelsmann magazines have captured a significant proportion of the sector, with circulations for Tele Star and Tele Poche falling by 15 to 20 per cent since the start of the year.

Tom Moloney, Emap's chief executive, said the company would not launch its own fortnightly listings magazine but would instead invest in promoting its existing titles. "We don't think the economics of one euro [the cover price] make sense. A euro is not sustainable in the long term.... They will have to increase the cover price," he said.

Bertelsmann is thought to have spent more than €20m (£13m) so far on attacking the listings market. Mr Moloney admitted it would be a "tough couple of years" in the sector.

Analysts estimated that the French difficulties would wipe up to £10m from profits for the current financial year. That meant that earnings forecasts for 2004-5 came down by between 5 and 8 per cent yesterday. Emap shares closed down 90p at 756p.

The news from France over-shadowed yesterday's full-year results, for the year to the end of March, which saw Emap break through the £1bn revenues mark for the first time.

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