French Publisher Lagardere First-Half Profit Rises 20% Buoyed by Ad Gains
Stock Chart for Lagardere SCA (MMB)
Lagardere SCA, France’s biggest publisher, said first-half profit rose 20 percent, buoyed by a rebound in advertising. The company raised its outlook for the full-year.
Adjusted net income at the publisher of Elle magazine rose to 97 million euros ($123 million) from 81 million euros a year earlier. Group net income fell to 80 million euros from 318 million euros in first-half 2009, when it was boosted by a one- time gain from the sale of a stake in European Aeronautic Defence & Space Co. Sales fell 2.7 percent to 3.72 billion.
Chief Executive Officer Arnaud Lagardere is making disposals to focus on the company’s main media assets. In July, Lagardere announced it would begin an initial public offering for its 20 percent stake in pay-television operator Canal Plus France after failing to reach a deal to sell it to Vivendi SA.
“Our results in the last three months confirm a revival in ad market signaled during the first quarter,” Arnaud Lagardere said in the statement. “Operating profit at the media unit should improve significantly relative to the targets set in March,” with a decline of 5 percent instead of the earlier forecast 10 percent drop.
The Paris-based company has also received interest from buyers for some U.S. magazine titles and even its entire U.S. magazine division, though no decision has been taken on a sale, the CEO said on a conference call.
Lagardere shares rose 0.8 percent to 29.28 euros at the end of trading at 5:30 p.m. in Paris. The results were released after the market close.
The planned IPO of Canal Plus will probably take place early next year due to the time required to prepare the company for flotation, Chief Financial Officer Dominique d’Hinnin said on the conference call. The 20 percent stake’s valuation is “crystal clear” at the 1.5 billion euros shown on Lagardere’s balance sheet, he added.
In addition to media, Arnaud has promoted a push into sports marketing and athlete representation through a new unit, Lagardere Unlimited. In May, the company announced the acquisition of Best, a U.S. sports agency with clients including basketball player Rafer Alston. It also took a minority stake in Saddlebrook, a sports academy in Florida.
In April, Arnaud Lagardere fought off a challenge from American activist shareholder Guy Wyser-Pratte, who sought a board seat to force a “strategic review” and changes to a corporate structure that gives the CEO extra powers.
The American investor failed to get on the company’s board, winning just 22 percent of votes for his candidacy at the April 27 annual general meeting.
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