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Just had a read through the H1 2014 results there, along with some of the broker commentary on them. I have to admit that it is very hard to see where this is going in the medium term. Reducing debt is great; if you are Smurfit Kappa. If your top-line revenue is decreasing year on year, its hard to be overly positive about how much less you owe. And 30% increase in digital advertising flatters to deceive; its an increase from 3 to 3.9Million. At the same time they have lost more than that in the reduction in print advertising, which contributes 10 times more to their revenue than digital. It looks a lot like someone trying to swim really hard into a current. Getting nowhere but becoming exhausted. And as for this nugget "Irish Independent continues to dominate the quality daily market"....come on. Who are they kidding. Its bargain basement stuff the indo.........
I'm glad you recognise the problems inm has. For the last while it has maintained profits by cost cutting. Great in itself but only treading water as the business is contracting and not growing. The fact is print media is selling less product yoy. The pie is shrinking and while they might shout about been No1in this and No1 in that it means diddly squat. So, they have a million views on the web paper, great, except without a pay wall the views are free. For web based businesses to give product away for free they need hundreds of millions of users. That way ad revenue is substantial and profitable. There just isn't the population here to justify free content in the long term. It won't take long for growth in digital add revenue to level out as views stabilise. You also recognised another fact. Growing online add revenue by 30% is great except in the bigger picture it means very little. Growing standard add revenue by 5% would be much more meaningful. Unfortunately, every time the number of newspapers been sold is announced that prospect reduces. But....O'brien and Desmond are no fools. I can't believe they wouldn't have seen all these thing already. Desmond could have cut and run at 18c but didn't. There must surely be a long term plan here. An improved economy should at least keep inm stable for now and give them a chance to do their thing. Long term there is still hope but for now its just sit and wait.
Denis o b`s 60m(todays estimate .) stake is worth far more to him than the monetary value! if he had had fair press in his early business life, he would be a lot wealthier now. He wouldn't be walking away now with such good deals, if he wasn`t protecting his reputation, through complicit media.To be able to capitalize, as he did with ESAT, while under INM`s glare, think what his potential is now. Who know what's going on now. Media is also very cyclical and there will come a day when he will, on SP alone , have recouped his 550m losses ,not to mention what profit from personal business deals. Denis has said when asked, that he would hope to see a return on his investment in 10yrs.(that would make anyone 10yr wait worth while /SP 130cent)