Feb 11, 2014
Lagardère raises profit forecast for 2013
Feb 11, 2014
French media group Lagardère reported weaker than expected sales on Tuesday but said profits were higher than previously predicted, citing improving trends in the book publishing and travel retailing business at the end of the year.
Chief Executive Arnaud Lagardère also reaffirmed the group's intention to return to shareholders some of the 1 billion euros ($1.4 billion) it got from the sale to Vivendi of Lagardère's 20 percent stake in pay-TV business Canal+ France.
A decision would be made before the next shareholder meeting in May, he said.
Lagardère, which competes with Pearson Plc and Bertelsmann AG in radio and book publishing, said it now expected to report a more than 5 percent rise in recurring media earnings before interest and tax (EBIT) for 2013, having previously predicted a rise of 0 to 5 percent.
Lagardère's shares were up 5.5 percent at 28.80 euros by 1009 GMT, when the Stoxx Europe 600 media sector index was up 1.2 percent.
Lagardère posted a 1.3 percent decline in full-year like-for-like revenue to 7.216 billion euros, short of the average of analysts forecasts of 7.382 billion euros according to Thomson Reuters I/B/E/S Estimates.
The decline was mostly sparked by a 3.8 percent drop in comparable sales at Lagardère Active, the group's magazines and radio division. The unit is the company's most sensitive to the advertising cycle.
The book publishing division, which accounts for a quarter of group revenue, saw full-year sales rise 1.9 percent on a like-for-like basis.
The company's largest division, Lagardère Services, achieved a 0.9 percent decline in sales on a like-for-like basis, driven by the Travel Retail business, which operates retail outlets in airports and train stations.
"At year's end, the Lagardère group benefited from improved trends in general literature, illustrated books, artworks and travel retail, which posted fine performances," Lagardère said in a statement.
UBS analyst Alistair Reid said that the better than expected 2013 operating profit was good news, although he questioned whether a bumper book sales during Christmas could persist.
"Investor focus will likely also be on special dividends after the Canal+ sale, with expectations for about 50 percent of the proceeds being returned or 4 euros per share," said Reid.
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