Poor festive magazine sales hurt Emap

Weak demand for bumper Christmas issues today saw media group Emap reveal a fresh slump in magazine sales ahead of its planned break-up.

Emap, which publishes titles such as heat and FHM, also warned that conditions are set to remain tough as it battles sliding circulation at its flagship magazines.

The Peterborough-based firm is due to complete the sale of its consumer magazine and radio assets to German group Bauer early next month after a shareholder vote today.

It is also offloading its remaining business-to-business arm to Guardian Media Group (GMG) and private equity firm Apax Partners.

Underlying revenues at the company’s consumer magazine arm, which also owns titles such as Closer, Grazia, Zoo and Angling Times, dived 10% in the three months to December 31. Circulation at the division was down 8% while advertising income fell 12%.

“December revenues in particular deteriorated with the Christmas issues weaker than expected.

“Trading conditions are expected to remain challenging for the remainder of the 2008 financial year”, Emap said in a statement.

The update comes after Emap agreed a sale of its consumer magazine and radio assets to Bella and TV Quick owner Bauer for £1.14 billion in December.

Emap has issued a string of profit warnings in recent years after it was hit by a downturn in the magazine market, which eventually led to the departure of chief executive Tom Moloney in May.

It launched a review in July after it received a number of unsolicited approaches and has also agreed a £1 billion deal to sell its trade magazines and exhibitions division to Guardian and Observer owner GMG.

Emap added that underlying third-quarter revenues at its radio business, which operates 38 local stations and owns brands including Magic and Kiss, rose 5%.

However, it said overall group trading is in line with expectations amid strong trading at its business-to-business operations.

Underlying revenue at the unit rose 11% as sales of trade magazines, which include titles such as Construction News and Retail Week, climbed 5%.