Emap chief quits to atone for US debacle

The chief executive of Emap, Kevin Hand, yesterday bowed to investor pressure and stood down from the magazine and radio group as payment for leading its disastrous foray into the United States.

Mr Hand's departure came as Emap highlighted just how poor the investment across the Atlantic has been. The company was forced to write down the value of the US magazine division, Emap Petersen, by £545m after buying it two years ago for $1.2bn (£860m).

The writedown, reflecting the fall in value of the struggling business, dragged Emap deep into the red. In the year to March 31 the company, which publishes FHM magazine and owns Kiss FM, recorded a pretax loss of £527m.

Mr Hand will be replaced by Robin Miller, 60, the Emap chairman who occupied the chief executive's chair from 1985 to 1998.

Mr Miller rejected the suggestion that his reappointment was a regressive step.

"The board in its wisdom felt that in the current state someone who knows the business well and knows the industry well was right for the job," he said. "I said I would do it for two years and will work at get ting the company back on the front foot before we start looking at succession issues.

Mr Miller added: "Under the shadow of Petersen there has been a lack of momentum and confidence within and surrounding Emap. We need to restore confidence and stability and get this business moving forward."

Mr Miller said Mr Hand had not been "a fall guy" and he took his share of responsibility as chairman of the board that approved the Petersen acquisition.

Mr Hand will take a year's salary of £425,000 and negotiations are under way on his share options, currently worth £1m. Adam Broadbent, a non-executive director, moves up to chairman.

The company said it remains in discussions for the sale of the US business and hopes to reach a conclusion by the end of this month.

Mr Miller admitted Emap overpaid for Petersen. "There was some misjudgment in the price but then automotive advertising fell off a cliff and there has been restructuring in the retail market in the US which has made it very difficult for specialist magazines."

The US edition of FHM, which is expected to reach 1m sales for its forthcoming "sexiest women" issue, will not be part of the disposal.

Group pretax profits before exceptionals were 5% higher at £197m and revenues climbed 5% to £1.15bn. Recruitment advertising in Emap's trade magazines was 28% higher and the company said the division was "categorically not for sale".

Radio advertising revenues fell 6-8% in the past three months against the 18-20% drop across the industry. Consumer magazine advertising is ahead of this time last year while circulation revenues were 13% higher. Shares in the company rose 25.5p to 831p.