Reuters
Publishing group Independent News & Media (INM) warned that operating profit would fall sharply this year as advertising revenue shrinks, after a difficult first half in which senior executives were pushed out.
INM is Business Report’s parent company.
Telecoms billionaire Denis O’Brien tightened his grip on INM earlier this year, increasing his stake to 29.9 percent, pressuring chief executive Gavin O’Reilly into resigning and leading a shareholder revolt that also ousted the company’s chairman
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New chief executive Vincent Crowley said on Friday the shake-up took place against a tough economic backdrop which showed no signs of easing and it was “not unreasonable” to assume profit would fall sharply in the second half
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INM posted operating profit of E25.4 million (R268m) in the six months to June, 26 percent down on the previous year and well below the E155m made in the first half of 2007 before Ireland’s financial crisis.
The company sold its flagship UK title the Independent and its media interests in India and shut loss-making titles in Ireland.
It generates about two thirds of revenue from newspapers in Ireland, including the dominant daily and Sunday titles, and the rest from the South African business, recently put up for sale, where it is the leading newspaper publisher.
“Weak economic conditions prevailed in Ireland, while the South African economy experienced multi-year lows in both consumer and business confidence,” Crowley said.
After taking account of E164m of non-cash impairment charges relating to the value of its newspapers, plants and property, the media group’s first-half loss increased nine-fold to E152m.
Revenue fell 4.4 percent to E272.2m after advertising spend dropped by roughly the same amount with an almost 10 percent fall recorded in Ireland.
The company, which is in talks with its banks about refinancing debt due to mature in 2014, has reduced its liabilities by just less than 1 percent since the end of last year.
Debt stood at E423.3m at the end of June, despite the group swapping debt for equity to secure its future three years ago.
INM said it would see whether it could sell its South African business on “attractive terms”, a deal Crowley said could potentially halve the company’s net debt.
The company said in July it had received a number of approaches for the unit.
According to sources, a team from Sekunjalo Holdings, a suitor that has submitted a bid of R2.4 billion for the South African operations, will be in Dublin this week to conduct a due diligence. – Additional reporting Wiseman Khuzwayo.