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The 'Danish surprise' is not in Mecom's interim results

Lacklustre results from Mecom's Danish arm was to be expected, but the latest proposed freehsheet merger certainly caught me by surprise.

I must admit I was a bit surprised to see Mecom shares tumble almost 5pc in yesterday's trading, after the company announced its interim results for the first half of 2007. To my mind, the preliminary report offered no big surprises.

Yes, Denmark is Mecom's Achilles heel, as it was Orkla Media's Achilles heel before David Montgomery's investment vehicle acquired it. Those who've followed this story will know that back then, Orkla Media's profit margin in Denmark was about 3pc, compared to 5pc in Poland and 7,5pc in Norway.

With one established and one brand new, albeit short-lived, free paper, the tumultuous Danish freesheet war was not likely to improve the financial prospects for Berlingske Officin, Mecom's Danish arm, any time soon.

Still, Mecom-boss Montgomery was none too pleased whith the disappointing Danish results, and Danish media speculated that this was the source of disagreement which saw Berlingske Officin's CEO Lasse Bolander replaced by Mecom's John Allwood.

The surprise? Well, I was gobsmacked when reported that Berlingske Officin was merging its surviving freesheet, the youth-oriented Urban, with its family-oriented tabloid B.T. a few weeks back. However, the article and headline didn't quite match, the press office was busy, I had other deadlines to chase, and by next morning the headline had been altered to support the article's more modest claim that the two newspapers' administrations were being merged.

Today though, quotes John Allwood saying that merging the editorial teams of B.T. and Urban is indeed an option being considered.

Now THAT prospect threw me. Of all the Danish freeshets Urban probably has the most distict profile, with a dedicated readership among 12-24 year olds, and was on course to deliver its first profit before the freesheet war broke out last August. The proposed marriage with B.T., a very different kind of paper, is certainly not one I had foreseen...


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