As the number of freesheets in Denmark has increased from two to four, the Mecom newspaper group has been forced to admit profits will fall short of what the company had previously forecasted.

Shares fell to 80p, a 4.8 percent drop in Denmark, the largest of the five northern European countries in which Mecom operates.

“What we've seen is the emergence of two new free newspapers in the market, taking the total to four, and a property market which has gone soft. But the group as a whole remains pretty much on target,” David Montgomery, executive chairman at Mecom, is quoted by the Times Online as saying.

Mecom has been able to grow profits in its other northern European countries to offset difficulties it is facing in Denmark, according to the Times. Although operating profits in the country did improve slightly, from £6.4 million to £6.8 million, Mecom was hit with a £14.8 million charge, mainly due to the closure of two Danish freesheets.

Montgomery, formerly chief executive of Mirror Group, has built up Mecom over the past 18 months through several acquisitions.