Publisher Mecom sees 2013 core earnings at top end of prior forecast

* Sees full-year core earnings at upper end of prior forecast

* Lowers net debt to 95.5 million euros

* First (Other OTC: FSTC - news) -half core earnings fall 15 percent

* Shares rise as much as 9.6 pct

By Abhirup Roy

July 31 (Reuters) - European publishing company Mecom Group (LSE: MEC.L - news) Plc said it expects 2013 core earnings at the upper end of its previous forecast as it continues to cut costs and sell assets in the face of declining advertising revenue.

The company, which owns more than 250 printed titles and 200 websites, said in April that it expected 2013 core earnings to drop significantly to between 50 million euros ($66.26 million) and 60 million euros, as advertising and subscription revenue, especially in its Dutch operations, continued to drag.

Shares in Mecom rose as much as 9.6 percent to 40 pence in early trading.

Numis Securities raised its rating on the stock to "buy", saying that even though Mecom remains a high-risk investment, the earnings forecast and its lower-than-expected debt prompted the upgrade. The brokerage also raised its target price on the stock to 65 pence from 43 pence.

Net debt fell to 95.5 million euros as on June 30 from 109.7 million euros a year earlier.

The print media industry has been struggling to hang on to readers and advertisers in the face of stiff competition from the Internet.

Mecom cut 230 full-time equivalent employees, in the first half, and reduced expenses by 11 percent, or 46 million euros. It also completed four disposals with a combined value of 52 million euros.

The company, which appointed veteran investment banker and M&A specialist Rory Macnamara as non-executive chairman in May, said it would undertake another restructuring of its Netherlands operations later this year.

"Mecom has been through a period of significant change, against the most challenging of trading backdrops. It has focused down to two country businesses and we feel more disposals are likely," Canaccord Genuity analyst Simon Davies said in a note.

EARNINGS DECLINE CONTINUES

The company said it would not pay any dividend this year and that it would review its dividend policy after further restructuring.

Mecom said its first-half core earnings fell 15 percent and reiterated that tough trading environment in the Netherlands would continue for the rest of the year at least.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell to 31.7 million euros ($42.01 million) in the six months ended June 30 from 37.3 million euros a year earlier.

Total (NYSE: TOT - news) revenue dropped 11 percent to 415.3 million euros. Advertising revenue, which accounts for nearly 40 percent of total revenue, fell 20 percent to 154 million euros from continuing operations.

"I think investors understand that this is a difficult business ... Whilst numbers are down it is encouraging that their guidance is being moved up," Peel Hunt analyst Patrick Yau said. "The question is to what extent can they offset that decline."

Mecom shares, which have lost more than half of their value since the beginning of 2013, were up 8 percent at 39.50 pence at 0941 GMT on Wednesday on the London Stock Exchange (LSE: LSE.L - news) .

Source: http://news.yahoo.com/publisher-mecom-sees-2013-core-094240144.html

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