Hollick swings jobs axe at United

CHIEF executive Lord Hollick is swinging the jobs axe again and slashing dividends at United Business Media as the group warned of a further deterioration in its businesses.

About 500 staff are thought to have been told that their jobs are going in addition to 200 job cuts made in November, but the company declined to discuss exact numbers until details are finalised. Dividends are also being chopped this year and next after the company upped the cost of expanding its rationalisation programme to £60m this year.

Hollick told shareholders that United was slashing its annual dividend by almost half to 12p this year. He said that they would not receive more than 7p in 2002. Shares in the company, which dropped out of the FTSE 100 index in November, shed 56p to 454p. Analysts at Charterhouse are maintaining their core operating profits forecast of £91m on sales of £891m this year, but said that investors were unnerved by the scale of the dividend cuts and the absence of a meaningful outlook statement for 2002.

United, which said at the half-year stage that it was cutting 600 jobs at a cost of £14m at US operations affected by the downturn in the technology sector. It now says that that it is being forced to make further redundancies across its global operations. The Blackfriars headquarters is likely to be among the sites affected by the job cuts and there have already been cuts at the PR Newswire operation, whose business suffered from the American stock market shutdown after 11 September. Plans to expand the operation into Europe remain in place.

The company said that Channel 5, in which it has a 35% stake and for which it recently provided a further £39m in financing investment, had experienced a 'significant decline in advertising' despite increasing market share. That pattern was repeated across parts of the CMP Media operations. The market research businesses are proving relatively resilient but jobs appear to be going at NOP, which 'has seen some softening of ad hoc activity in the second half in the consumer, automotive and technology sectors'.

After exiting building leases, the total of £60m in restructuring charges now matches cost savings that the company originally hoped to achieve when it unveiled its plans to rationalise operations earlier in the year.