There are two main issues to consider for the Media sector, UK recession and currency. Large and mid-cap B2B is likely to be a net beneficiary of sterling weakness as they are heavily exposed to US$, while exposure amongst small cap B2Bs is typically modest but may well be enough to offset any domestic weakness. B2B looks a good safe haven and Informa (TP690p, Hold) and UBM (TP605p, Buy) look good value. Marketing Services is a barbell subsector; WPP’s might overseas and in its offering will probably outweigh its still significant UK operation. At the smaller end individual client mandates will be more important, client losses are hard to predict and potentially UK expertise could look cheap to overseas businesses. Consumer media looks more vulnerable. A mix of high domestic exposure, cyclical exposure and high operational gearing looks poisonous. ITV, Rightmove and Autotrader look likely to suffer.
