THE DOWNS AND UPS OF PUBLISHING
September 28th 2004. LONDON, Sept 28 (Reuters) - Shares in UK publisher Highbury House Communications Plc fell 25 percent on Tuesday after it said it would miss full-year forecasts due to patchy advertising and falling circulation at its consumer magazines.

The publisher of niche titles such as Fast Bikes and Gardens Monthly said it had faced a challenging six months to end-June, with consumer markets more difficult than it had anticipated. As a result it will pay no interim or final dividend this year.

Competition in Britain's consumer magazine market is stiff, with specialist publications vying for advertisers, shelf space and readers against more generalist publications, particularly in the fast-growing market for men's magazines.

"Given the lack of visibility, especially of copy sales, and against a background of weaker-than-anticipated markets and performance in the first half, the board no longer expects profits to meet market expectations for the full year," Chairman Simon Neathercoat said in a statement.

The company, which named a new chairman, chief executive and finance director in August, now expects pretax profit before amortisation and exceptional items of no more than 7 million pounds ($12.6 million) for 2004. The consensus market forecast had been for 11.1 million, according to Reuters Estimates.

At 0820 GMT the stock was down 20.4 percent at 8-3/4 pence after earlier touching 8-1/4p, its lowest level in over five years.

"It's a case of them having too much to do. It's going to be a long process for them to get back to making serious money," one dealer said.

By contrast, larger rival Emap said on Tuesday that advertising sales for its consumer magazines such as FHM and Closer would be "marginally ahead" of the 3 percent gains in its first half.

Highbury said its pretax loss narrowed slightly to 25.7 million pounds in the six months to June 30 from 27.7 million a year ago on a 24 percent rise in revenues to 55.5 million pounds. This was largely due to new acquisitions Cabal and Paragon, which contributed 28 percent of group sales.

Excluding the acquisitions, like-for-like sales fell 5 percent, advertising revenues were down 4 percent and circulation revenues fell 3 percent.



Reporting by Lara Smith; editing by Jane Baird; lara.smith@reuters.com; Reuters Messaging: lara.smith.reuters.com@reuters.net;