In a trading update issued today, Emap updated its operational review and said it had identified cost savings of £20m a year. However, it will also spend up to £30m for major expenses, as well as £10m for new systems and buildings.
Emap's consumer magazines and radio products have undertaken detailed assessments of all processes, systems and organisational structures for efficiency. Its B2B division is in the process of relocating seven businesses into one London office, which Emap hopes will bring greater efficiency.
In terms of trading, Emap's B2B division, which has made some major acquisitions over the past years, predominantly the Cannes Lions International Advertising Festival in 2004 for £52.5m, is performing strongly.
Financial results in its consumer media divisions, and radio in particular, has been weaker than anticipated and Emap predicts that the outcome for the current financial year is likely to be toward the bottom end of market expectations. However, the company expects trading conditions in B2B to remain robust.
Tom Moloney, Emap Group chief executive, said: "The management actions we are taking are a positive response to prevailing market conditions and will allow us to continue our strategy of developing strong media brands across platforms.
"The fact we have identified substantial savings, given that we already operate on industry leading margins, signifies the progressive approach we are taking to operational efficiency."
Emap recently acquired mobile UGC firm Yospace Technologies in an £8.7m cash deal to sit with its consumer media titles which include FHM, Grazia and Max Power. This move puts Emap at the forefront of the emerging mobile media market which is set to become increasingly important for media consumers.
Just this week, Emap downplayed the importance of the report being written by McKinsey to review its business, saying it only covers the group's golfing and motoring portfolio. An Emap spokeswoman said McKinsey had already completed its work, which was to advise the company on exploring digital revenue streams for titles such as Motorcycle News and Today's Golfer.
Shares in Emap were down 62p this morning to 746.5p, a 7.67% drop.
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