Mecom FD criticised over trading update
Group plunges 30% after update left out crucial information
The FD of European newspaper group Mecom has been criticised after the group
released a trading update that left out crucial information, leading to a 30%
share plunge.
Frantic efforts to quell concerns following Tuesday’s update failed to
recover the drop but shareholders are now asking questions about the way in
which the update was handled by finance director Keith Allen.
The information that had been left out related to the group’s planned
disposal of De Trompetter, a Dutch title, which is set to hit earnings before
interest, tax, depreciation and amortisation by £4m.
The 2008 depreciation charge is also set to be in the region of £55m, rather
than the expected £49m by the group’s broker Numis Securities. It also expected
its interest charge for 2008 to be about £40m rather than the £33m projected by
analysts.
One shareholder source said it was the failure of communication that led to
the problems, the
FT
reported.
‘The finance director should have known better,’ the source said.
The AIM-listed group indicated that profit margins for 2008 ‘should improve
towards the level of initial expectations’ but added that new information that
had emerged in analyst and investor briefings had been absent from a trading
update released earlier in the week.
Further reading:
Brokers
cut Mecom’s pre-tax profit forecast
RPT-UPDATE
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