A view from Colin Grimshaw

Emap bosses may have run out of ideas ... and time

With Emap's latest round of cost-cutting, this time at its consumer magazine division, underway, the spotlight moves to the group's next trading update on 27 March and the unveiling of full-year results eight weeks later.

Investors will be hoping there are no more shocks like last month's profit warning, while evidence of a clear growth strategy may have to wait until the completion of the review being conducted by McKinsey, the latest set of consultants hired to cast their eye over the group's business.

Whether investors are prepared to wait for its conclusion is another matter. A break-up of the firm is back on the agenda and long-suffering shareholders and circling private equity outfits may see greater value in splitting the B2B and consumer businesses.

On one level, Emap is a successful media business. Margins in its key divisions are among the highest in their sectors. But it has two problems. The consumer division lacks real growth potential and, as the most highly diversified of media groups, it has found synergies between the group's component parts difficult to find.

This is even the case within the consumer group. Efforts to find consumer-facing brand propositions for its big multimedia brands appear to have been jettisoned with the departure last week of the senior executive charged with that responsibility.

The better performing B2B division has its own problems with magazines, like Nursing Times, seeing an exodus of advertising to online, including the NHS' own recruitment site. However, it is achieving decent growth - first-half revenues were up 11% on last year.

A big success has been the £140m purchase of Worth Global Style Network, a portal used by the fashion trade to source catwalk trends.

After a 32% increase in first-half revenues, insiders say that WGSN is now Emap's single biggest profit earner.

Yet, growth through bolt-on acquisitions only highlights the lack of organic growth within Emap.

This theme carries through analysts' disappointment that the bulk of the £380m received from the sale of Emap France was returned to shareholders, rather than invested in the business.

This, and the wholesale hiring of consultants, suggests that Emap's management has run out of ideas and, maybe, time.

- Colin Grimshaw is deputy editor of Media Week.

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