Shares in struggling Dutch regional newspaper publisher Mecom (MEC) eased off slightly following the release of these full-year financial results. But that’s understandable given the four-fold rise in the company’s share price since last summer.
Mecom shareholders have been cheering the successful disposal of several non-core titles, which has helped greatly reduce borrowings. After hiving off a handful of publications in Denmark and Poland throughout 2013, net debt fell to just €38m (£32m) at the year-end, from €130m a year earlier. And just last month Mecom announced it reached a “preliminary, but non-binding, agreement” to sell its subsidiary in the southern Dutch province of Limburg for an as-yet undisclosed sum.
In another encouraging development, Mecom has agreed new bank facilities totalling €140m, with which it expects to refinance its current borrowings at improved rates. This removes another uncertainty for the group and undoubtedly places it on a safer financial footing.
Nevertheless, the steady fall in content sales and advertising revenues is showing few signs of abating. Relentless cost-cutting is reducing the burden but is not quite keeping pace. Mecom prudently decided not to resume its dividend this year.
Broker Canaccord Genuity expects adjusted pre-tax profits to fall to €36m in the current year, giving adjusted EPS of 22¢, down from €48m and 30¢ in 2013.
MECOM (MEC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 119p | MARKET VALUE: | £144m | |
| TOUCH: | 119-120p | 12-MONTH HIGH: | 136p | LOW: 27p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 73¢* | NET DEBT: | 42% | |
| Year to 31 Dec | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2009 | 1.5 | -146 | -188 | nil |
| 2010 | 1.2 | -95 | -54 | nil |
| 2011 (restated) | 1.0 | -28 | -19 | 15.4 |
| 2012 (restated) | 0.9 | -102 | -73 | 11.5 |
| 2013 | 0.8 | -71 | -54 | nil |
| % change | -11 | - | - | - |
*Includes intangible assets of €319m, or 263¢ £1=€1.19 | ||||
