LONDON (Reuters) - European newspaper group Mecom MEC.L set ambitious targets for growth in its online operations after surviving a debt crisis, asset sales and an 18 percent drop in advertising revenues in 2009.
Mecom, based in Britain and run by former Mirror Group Chief Executive David Montgomery, said on Wednesday it looked forward to improved profitability this year, even without growth in print-ad markets, after core profit fell 28 percent in 2009.
“We cannot yet call an upturn but do take some comfort from more positive recent economic indicators in all of the countries in which we operate. These tend to suggest some improvement in advertising overall,” Montgomery said in a statement.
Mecom set new targets for end-2012 including increasing new revenues from non-print operations by 100 million euros (90 million pounds) from a base of 67 million euros in 2009, and cutting net debt to less than twice EBITDA from 3.1 times at end-2009.
Mecom owns hundreds of mainly local newspapers and websites in the Netherlands, Denmark, Norway and Poland, including respected Polish daily Rzeczpospolita.
The group has been faster than most other newspaper groups to adjust to changed conditions in the industry, which has been worn down by its readers and advertisers moving online and away from print publications, as well as by the recession.
Last year, Mecom sold off newspapers in Norway, the Netherlands and Germany, issued new shares and slashed costs to pay down debt, which stood at 373.4 million euros or 2.1 times EBITDA at end-2009, down from 682.5 million euros at end-2008.
Mecom’s adjusted earnings before interest, tax, depreciation and amortisation fell 28 percent in 2009 to 125.5 million euros, and earnings per share dropped to 0.07 euros from 3.09 euros.
Advertising revenues fell 18 percent over the year — with the decline slowing to 15 percent in the second half and continuing to slow this year — circulation revenues were flat, and total revenues fell 12 percent to 1.4 billion euros.
Mecom said it now had a reasonable expectation of continuing as a going concern for the foreseeable future.
Reporting by Georgina Prodhan; Editing by Hans Peters