SHARES in Mecom plummeted yesterday after the European newspaper publisher said it sees no end to declines in advertising revenues.
The company, which publishes papers in the Netherlands, Denmark and Poland, said the Dutch economic crisis “is expected to affect advertising revenues for the foreseeable future and any improvement in economic conditions and consumer confidence is not anticipated until later in the year at the earliest”.
The news sent shares down by over a third, wiping £40m off the company’s value yesterday. When the company floated in mid-2008, it was worth almost 20 times that.
Mecom said yesterday that if advertising revenues continue to decline, revenues will fall far short of market expectations, and it will not be able to cut costs at an appropriate rate to keep profits in line.
The group said year-on-year advertising sales will fall by more 20 per cent over the next two months, although it put this down to general market conditions.
The company’s worsening performance raises questions over whether it will be able to complete a plan to sell off businesses to try and hand shareholders a return.
Mecom, founded by ex-Mirror Group boss David Montgomery, saw losses of €30.4m (£25.9m) last year.