Newspaper firm Mecom will shift its focus to online advertising after a double digit drop in print ad revenue.
Hopes of a recovery in the advertising sector stalled last month as Mecom’s sales dipped eight per cent.
Pre-tax profit for the year plunged by 28 per cent to £113m. It was dragged down by an 18 per cent fall in advertising revenue.
Mecom publishes titles across Holland, Norway, Denmark and Poland.
The UK-based firm, run by former Mirror Group chief executive David Montgomery, says it hopes to arrest the decline this year and predicted core earnings will rise by 10 per cent.
But it says it will undergo a fundamental shift, seeking “new revenues for areas other than traditional print publishing.” It aims to increase new revenue streams by more than a third to £90m, including beefing up its online portfolio and developing its paid for content.
It announced big cost savings, cutting its net debt by 45 per cent to £353m, or 3.1 times earnings. Mecom hopes to reduce this to two times earnings over the next two years.
Mecom also slashed its operating costs by £126m last year, representing 10 per cent of its total sales. Overall staff levels fell by nine per cent.
Montgomery said: “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.
“The whole business now is all about reducing the cost base and increasing productivity. This is very much a scientific approach in making people more productive in what they do.”