European newspaper Mecom profit leaps on cost cuts, circulation up

European newspaper group Mecom posted a 48 percent leap in first-half operating profit as it continued to drive costs out of the business as part of an aggressive move from traditional print to online local content. Mecom, which operates in the Netherlands, Denmark, Norway and Poland, said advertising revenue fell 3 per cent but online newspaper advertising grew 47 per cent, with 5.7 per cent of group sales now generated online. Circulation revenue rose 2 percent. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose to £70.1m ($109m) in the six months to end-June despite a 2 per cent fall in revenue to £708m. "We are well advanced in making the business overall more efficient," Chief Executive David Montgomery told Reuters in a telephone interview on Wednesday. "The new operating model is taking shape." Shares in Mecom, which is headquartered in Britain, rose 2.1 per cent to 218.5 pence by 0752 GMT, outperforming a flat European media index. London brokerage Numis raised its target price to 330 pence from 276 pence and kept its "buy" rating on the stock.