Independent News & Media Regulatory News (INM)

27 Mar 2008 07:02

Independent News & Media PLC27 March 2008 INM DELIVERS STRONG PROFIT AFTER TAX* GROWTH OF +8.6% Dublin/London 27th March 2008: The Board of Independent News & Media PLC ('INM'or the 'Group') (ticker: Bloomberg - INM.ID; INM.LN; Reuters - INME.I; INME.L)today announced the Group's full year results for the 12 months ended 31stDecember 2007. A detailed presentation on these results is available on theGroup's website www.inmplc.com. This release also incorporates INM's InterimManagement Statement relating to the 11 weeks from 1st January 2008 to 14thMarch 2008. RESULTS 2007 2006 Change •m •mRevenue 1,673.5 1,635.7 +2.3%Operating Profit* 349.2 329.5 +6.0%Operating Margin* 20.9% 20.1% +80bpsProfit Before Tax* 286.1 265.7 +7.7%Profit Before Tax 248.4 250.1 -0.7%Profit After Tax* 228.9 210.7 +8.6%Profit After Tax 195.7 198.4 -1.4%Basic Earnings Per Share 14.6c 15.7c -7.0%Adjusted Earnings Per Share** 18.8c 17.4c +8.0%Dividend Per Share - full year 13.70c 12.45c +10.0% * Before exceptional items ** Diluted EPS, before exceptional items SUMMARY HIGHLIGHTS • Record revenues of €1,673.5 million, up 3.9% in constant currency (+2.3% in Euro terms) • INM outperforms peers, with advertising revenues growing by 5.4% and circulation revenues up 0.6% in constant currency in the Publishing division • All business and geographic segments show operating profit growth in 2007, with Group operating profit* up 6.0% (+7.8% in constant currency) • Group operating margin further enhanced by 80bps to 20.9%, reflecting benefits of cost restructuring • Profit after tax* up 8.6% reflecting a strong operating performance across all regions • Adjusted Earnings Per Share** of 18.8 cent up 8.0% • Rising profit contribution from associates and joint ventures, with JPL (India) continuing to show strong growth • Asset base enhanced by strategic investments in 2007 including - Education (Independent College, Ireland), Radio (Radio Mantra, India), Publishing (The Chronicle, Australia) and in 2008 - Publishing (Sligo Champion, Ireland), Online (www.yourlocal.ie, Ireland) and Outdoor (Clear Channel Independent, South Africa) • Further expansion of Online division drives revenue improvement of 111.5% in constant currency (+108.5% in Euro terms) • 10% increase in proposed final dividend to shareholders of 9.13 cent per share - OVERVIEW - INM's full year 2007 record results reflect good underlying year-on-year growthin both advertising and circulation revenues, demonstrating the strength of theGroup's diversified and market-leading positions across publishing and online,radio and outdoor advertising. Group revenues increased by 2.3% year-on-year to €1,673.5 million (up 3.9% inconstant currency terms). • INM's Publishing division performed very well with revenues up by 3.3% in constant currency terms. • Publishing advertising ahead across all markets (Australasia, Ireland, South Africa and the United Kingdom), up 5.4% in constant currency. Total circulation revenues up 0.6% in constant currency. • Online revenues (including the Group's share of associates) increased by a very substantial 108.5% to €52.5 million in 2007 or up 111.5% in constant currency terms. • Outdoor revenues grew 13.1% on last year (up 14.2% in constant currency terms). • Radio revenues grew 3.4% during 2007 (up 0.6% in constant currency terms). INM continued to actively manage its operating costs in 2007 with year-on-yearoperating costs (pre-acquisitions) down 1.5%, despite an increase in newsprintcosts. In line with prior market guidance - during 2007 - INM took a netexceptional charge of €37.7 million primarily to enable it to significantlyre-engineer its headcount and internal workflows across each of its mainpublishing divisions. This process is now largely completed. Headcount hasreduced by over 550 during the year, yielding annualised cost savings of approx.€19 million (approx. €12 million of these savings are reflected in 2007). Group operating profit (before exceptionals) increased by 6.0% to €349.2 millionfor the full year (up 7.8% in constant currency). All regions and businesssegments increased operating profit year-on-year. Revenue growth across theGroup's operations, combined with INM's continued focus on reducing operatingcosts, delivered an 80 basis point increase in the Group's operating margin to arecord 20.9% for 2007. Adjusted Earnings Per Share** increased 8.0% to 18.8 cent, reflecting theGroup's strong operating and financial performance in 2007. - DELIVERING AND DRIVING GROWTH - INM's objective is to continue to strengthen its asset base by both organicgrowth and strategic investments, thereby enabling the Group to deliver superiorreturns. Over the past 12 months, INM has made further significant progresstowards this objective across publishing and online, outdoor advertising andeducation. Publishing • In July 2007, APN acquired the remaining 50% that it did not already own, of The Chronicle in Toowoomba and a number of other weekly and non-daily community titles in its Queensland regional markets. • In December 2007, INM's Irish operations agreed to acquire the Sligo Champion, a west of Ireland regional newspaper, complementing INM's existing portfolio of leading regional titles across the Irish market. • In February 2008, the Irish operations also launched two new regional titles, the Waterford People and Dungarvan People. Online • INM continues to expand its existing online asset base through organic advertising growth (now over 12 million unique users per month delivering almost 130 million page impressions) and selective acquisitions. Recent acquisitions include: • APN completed a number of acquisitions including the following: the purchase of a minority investment in online holiday accommodation broker, www.roamfree.com; the acquisition of entertainment listings portal, www.eventfinder.co.nz; and in early 2008 the purchase of www.finda.co.nz, New Zealand's most popular online business directory. • In Ireland, INM has recently formed a new joint venture with Carside Ltd (Australia) to launch www.yourlocal.ie - a dedicated online search directory for Ireland. • In the United Kingdom, INM purchased a minority interest in www.covestor.com - a real-trade sharing service for proven self-investors, and acquired and re-launched netlondon.com, the London listings directory. • While INM is first and foremost focused on organically developing and profitably growing its online editorial, classified and search platforms, the Group also has selective investments in e-commerce and transactional platforms such as price comparison (Verivox), online gaming/bingo (Cashcade), as well as early-stage investments in fast-growth sectors such as 'Image search' (Imprezzeo) and 'Mobile VoIP' (Truphone). Outdoor • In January 2008, INM agreed with Clear Channel Outdoor ('CCO') to acquire CCO's 50% interest in Clear Channel Independent ('CCI'), Africa's largest outdoor advertising company, taking INM's ownership to 100%. • INM has owned CCI as a 50-50 joint venture with CCO since 2001. This transaction simplifies INM's corporate structure and increases the Group's exposure to high growth African markets. CCI is the largest and fastest-growing outdoor advertising company in South Africa - which will host the 2010 FIFA World Cup - with significant operations also in Angola, Botswana, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe. The transaction has received South African regulatory approval and is expected to complete shortly. Consideration for this acquisition will be satisfied by the issue of 39 million INM ordinary shares on completion. Education • During 2007, INM identified the area of education as an attractive and fast-growing sector in which to strategically invest. The Group's initial investment saw the launch of Independent College in Ireland; building on INM's existing educational platforms - editorial and online - and creating a learning experience that is complementary to its existing portfolio of assets. • This concept is scaleable across each of the Group's markets and will greatly benefit from cross-promotion across the Group's leading publishing titles, radio stations and outdoor sites. - VALUE DRIVERS - INM's objective is to continue to deliver superior earnings growth relative toits industry peer group. INM expects to deliver superior growth and shareholderreturns through a continuing focus on its medium-term value drivers. Theseinclude: • Increasing exposure to higher growth markets - INM has market-leading positions in some of the world's fastest growing markets. Each of INM's primary markets is expected to continue to show growth. Through measured investment and acquisition, INM expects to increase its exposure to these markets which show structurally superior growth characteristics across a business cycle; • Delivering increased operating leverage through innovation, new product development and ongoing process improvements - INM strives to be the industry's low cost operator as measured by Group operating margins. INM expects to further enhance its operating margins in 2008 and beyond through a series of business process improvements together with continuing product development and innovation; • Utilising INM's financial resources for business expansion outside traditional media including online and education - The highly cash generative nature of INM's core business and the strength of its balance sheet provide it with the financial resources to continue to expand its online presence and, where appropriate, to leverage the strength of its franchise and its market-leading positions across an expanding multi-media platform. INM also intends to continue its expansion into complementary and scaleable sectors including education; and • Continuously assessing opportunities to consolidate or divest minority interests to enhance shareholder value - INM has a number of minority interests within its current business portfolio. This provides the Group with comparatively low risk exposure to both new sectors and new markets. INM continues to assess opportunities, within its portfolio of assets, to either consolidate or divest minority interests to generate incremental shareholder value. The strategy of the Group is one that sustains growth during challenging, aswell as benign, conditions because of its geographic diversity, itsmarket-leading brands and the above average economic growth rates of the marketsin which it operates. As a result INM is a growth business with defensivecharacteristics. - EFFICIENT CAPITAL MANAGEMENT - As part of INM's policy of efficient capital management, the Group repurchased40,600,363 Treasury Shares during 2007. As previously announced, the objectiveof this buyback programme was to minimise the dilutive impact, for allshareholders, of the maturity of the New Zealand Cumulative ExchangeablePreference Shares ('CEPS'). In total 52,291,119 INM shares were issued onconversion of the CEPS in November 2007. The acquisition of Treasury Shares byINM resulted in limiting the dilutive impact of the CEPS conversion on INMshareholders to approximately 1.5%. Given the turbulence in the worldwide credit markets over recent months and itsadverse impact on credit spreads, rates on offer in New Zealand have becomeunattractive for INM and as a result, INM has decided not to proceed with theproposed Convertible Notes issuance in New Zealand, announced in October 2007.It was intended that the majority of the funds raised under this instrumentwould have been used to redeem the Group's €125 million 8% GuaranteedSubordinated Notes ('Notes'). These Notes do not mature until December 2008 andthe Group has sufficient cash resources and headroom on existing bank facilitiesto redeem these Notes, in the absence of a more cost efficient alternative. - BOARD - In May 2007, INM, its Board of Directors and its management team were saddenedby the death of Mr. Vincent Ferguson, who as the Senior Independent Director ofINM and Chairman of the Audit Committee, made a valuable contribution to theGroup. On 13th June 2007, Baroness Margaret Jay was appointed as INM's new SeniorIndependent Director. In addition, the Right Hon. Kenneth Clarke joined theBoard of Directors on 14th June 2007 as an independent, Non-Executive Directorand joined INM's Audit Committee on 14th August 2007. Mr. Bernard Somers (FCA) -independent, Non-Executive Director - joined the Audit Committee on 18thDecember 2007 and was appointed Chairman of this Committee on 26th March 2008. - DIVIDEND - INM has a progressive dividend policy. Reflecting the Group's positive operatingperformance in 2007 and strong balance sheet, the Board is recommending a finaldividend of 9.13 cent per share, an increase of 10.0% on 2006. This brings thetotal dividend for the year to 13.70 cent per share, an increase of 10.0% on2006. The final dividend will be paid on 13th June 2008 to ordinary shareholdersregistered at the close of business on 18thApril 2008. A scrip dividendalternative will also be available. - OUTLOOK - Commenting on the 2007 full year results, Sir Anthony O'Reilly, Group ChiefExecutive Officer, made the following outlook statement: "Your Group's brand-leading portfolio of media assets - across publishing andonline, radio and outdoor advertising - serves over 100 million consumers everyweek, and provides a unique and unrivalled commercial media network. "INM continues to distinguish itself from its peer group through a continuingand unrelenting focus on delivering and driving shareholder value. As INM'strack record and its 2007 performance demonstrate, the Group continues todeliver consistent growth in revenues, earnings and dividends. "The business has traded well through the first three months of 2008, with Groupearnings ahead of last year and all regions growing total revenues in constantcurrency. Despite the uncertain economic background, we remain confident that,on the basis of current trading in all our geographies, INM can deliver afurther year of earnings growth." - OPERATIONS REVIEW - AUSTRALASIAOVERVIEW 2007 2006 Change •m •mRevenue 769.4 741.6 +3.7%Operating Profit* 192.7 181.1 +6.4%Operating Margin 25.0% 24.4% +60bps APN News & Media Ltd ('APN'), in which INM has a 39.2% shareholding, is listedon the Australian and New Zealand Stock Exchanges, with a current marketcapitalisation of €1.3 billion. Operating profit increased 6.4% to €192.7 million in 2007 (up 3.8% in constantcurrency). APN's revenue increased 3.7% to a record €769.4 million. Thisperformance delivered a record operating margin of 25.0%, an increase of 60basis points over the prior comparative period ('pcp'). The Regional Publishing division performed well in 2007, reporting an increasein operating profit of 5.3%. Sustained strong economic conditions in Queenslandand buoyant commodity markets created a positive economic backdrop for all ofAPN's local publishing operations, with all publications maintaining marketshare. APN publishes seven of the 10 fastest growing regional titles inAustralia. To leverage the strength of APN's existing media brands and to developcomplementary assets, a series of regionally-focused gloss magazines wereacquired or launched during 2007. A key component to the success of many of thenew offerings to readers and advertisers has been the significant investment innew press production technology over recent years. In New Zealand, propertyadvertising remained a cornerstone of the good performance for the regionalnewspapers, particularly in the coastal areas of Whangarei and Hawke's Bay. Although economic conditions in New Zealand remained flat in 2007, the NewZealand National Publishing division grew operating profit to record levels. Astrong cost focus, innovative sales campaigns and new product extensions helpeddeliver this outcome. According to the Nielsen National Readership Survey forJanuary-December 2007, The New Zealand Herald increased readership by 3% to585,000 readers, and the Herald on Sunday increased readership by 6% to 345,000readers, outpacing the rest of the market. These two titles are the fastestgrowing paid-for newspapers in the country. The Weekend Herald remains themost-read newspaper in New Zealand, with 624,000 readers. The Online division made significant progress in growing revenue from onlineextensions of existing APN media brands, as well as from new online investments.The New Zealand Herald website, www.nzherald.co.nz, produced record revenuegrowth, averaging almost 600,000 unique users each week. The launch of thecommunity website, www.thedaily.com.au, on the Sunshine Coast (Queensland) in2007 was well received. The Radio division delivered a solid performance in highly-competitive tradingconditions. In a sluggish market, the Australian Radio Network finished the yearstrongly with good ratings momentum. In New Zealand, The Radio Networkmaintained its position as market leader, growing its overall audience share tomore than 45%. In the past five years, it has rapidly expanded the reach of itsnetwork, launching 31 new stations across New Zealand. APN Outdoor produced an outstanding result in 2007, confirming its position asthe region's leading outdoor advertising business. The division reported a 42%increase in operating profit. In New Zealand, APN Outdoor secured two of thecountry's largest outdoor advertising contracts. The division continues toachieve good year-on-year growth in Asia, with strong progress in the Malaysianand Indonesian businesses. The strong Chinese economy contributed to good growthin the Hong Kong market, which together with the upcoming Beijing Olympicsshould deliver further benefits for APN in 2008. IRELANDOVERVIEW 2007 2006 Change •m •mRevenue 401.3 404.7 -0.8%Operating Profit* 98.3 94.4 +4.1%Operating Margin 24.5% 23.3% +120bps In 2007, operating profit at €98.3 million, increased by 4.1% year-on-year. Thisresulted in an increase in operating margin of 120 basis points to 24.5%. Revenue of €401.3 million was marginally down (-0.8%) due entirely to the lossof some high revenue, low margin distribution contracts during 2006. However,advertising and circulation revenues performed strongly, increasing by 7.6% and2.1% respectively year-on-year. The strong increase in advertising revenues in 2007 (against an overall marketincrease of only 1.3%, as per the recently released NNI figures) reflectedparticularly strong run-of-paper display and colour revenues in the government,retail, financial, supermarket and airline categories. In addition, magazinerevenues continued to show very strong growth. The property and recruitmentcategories delivered very good first half performances, but market softnessresulted in weaker revenues in the second half. In perhaps the most competitive newspaper market in the world, INM's circulationrevenues grew by an impressive 2.1% on the prior year, driven by solid salesvolumes and cover price increases. The Irish Independent remains the clearnumber one daily newspaper in Ireland, recording a strong ABC of 160,854 copiesin the July to December 2007 ABC period. Ireland's largest selling qualitySunday newspaper, the Sunday Independent, delivered a solid performance,recording a July to December 2007 ABC figure of 282,459 copies, and continues tobe Ireland's most read newspaper, maintaining its unique position of deliveringover one million readers each and every Sunday. The Sunday World continued its circulation growth with an excellent July toDecember 2007 ABC of 283,801 copies for the island of Ireland, and it remainsIreland's most read and biggest selling tabloid newspaper. Despite the increased volume of freesheets in the Dublin metro market, theEvening Herald continued to show brand resilience and with continuing editorialenhancements delivered a July to December 2007 ABC of 82,084 copies. The group'sdaily free newspaper, herald am, delivered very impressive growth in advertisingrevenues and remains the largest free circulating newspaper in the country, withrecent audited figures confirming a verified free distribution of over 80,000copies per day, approx. 5,000 copies more than its daily competitor. The group's joint venture publication, the Irish Daily Star delivered a dailycopy sale of 112,042 in the July to December 2007 ABC period, continuing itsstrong circulation volume growth. Its sister publication, the Irish Daily StarSunday, in only its fourth year since launch, continues to make good progress,achieving a July to December 2007 ABC of 65,045 copies. As part of INM's drive to find efficiencies and implement new work flows, INMoutsourced page production and all sub-editing functions during 2007, whichdelivered significant cost savings and efficiencies and contributed to theincreased operating margin. During 2007, INM's 12 paid-for regional titles in counties Cork, Kerry, Dublin,Louth, Wexford, Wicklow and Carlow delivered a combined weekly circulation ofover 112,000 copies. The strength of these local brands is reflected in stronggrowth in advertising revenues for 2007. INM continues to expand its regionalportfolio in Ireland with the recent launch of two new titles, Waterford Peopleand Dungarvan People, and the recent acquisition of the Sligo Champion. In September 2007, INM announced the establishment of a new privately fundedthird level college. Backed by a team of leading educators, Independent Collegecombines teaching excellence with superb learning materials and onlineresources. Courses include Law, Accountancy, Journalism, Arts and ContinuousProfessional Development. Courses started in November 2007 and enrolments todate have exceeded expectations. INM's Irish Online division continued to show excellent growth in 2007, with astrong 43.3% increase in revenue year-on-year, following the major re-launch ofwww.independent.ie in May 2007. In only its second full year in operation,www.LoadzaJobs.ie continues to show strong advertising revenue growth,delivering substantial increases in the number of jobs listed and visitors tothe site. Following its acquisition in 2006, www.propertynews.com continued itsrapid expansion during 2007 and has become the largest property website on theisland of Ireland. Subsequent to the year end, www.yourlocal.ie - a fullycomprehensive national and local online search directory - was launched. SOUTH AFRICAOVERVIEW 2007 2006 Change •m •mRevenue 234.7 262.8 -10.7%Operating Profit* 59.1 55.2 +7.1%Operating Margin 25.2% 21.0% +420bps In 2007, operating profits of €59.1 million increased by 7.1% or by animpressive 26.0% in constant currency terms. This growth, together with benefitsfrom restructurings in prior years, drove operating profit margins to 25.2%, anincrease of 420 basis points on the prior year. Individually, each of the main Metro newspaper regions (the Cape, Gauteng andKwaZulu Natal) performed well, reflecting underlying improvements in bothoperating profits and margins. Revenue at €234.7 million was down 10.7% in Euro terms on 2006 due to adversecurrency movements, but was up by 5.3% year-on-year in constant currency, drivenby good advertising and circulation revenues, where the group's tabloid productsin particular - Isolezwe and Daily Voice - made strong contributions. Advertising advanced by 8.2% in constant currency, reflecting a strongperformance, despite heavy discounting by competitors and an economy whichexperienced a series of interest rate increases (350 basis points since June2006). Equally, despite ever-competitive market conditions, circulation copy sales ofthe group's main morning weekday titles recorded year-on-year growth. Firm copysales, combined with the ongoing aggressive growth in the sales of the group'sZulu-language newspaper, Isolezwe, and red-top popular daily, Daily Voice,provided overall strong circulation revenue growth of 8.4% in constant currencyover the pcp. Plans are at an advanced stage to expand the successful Isolezwefranchise into the weekend market. While online penetration in South Africa remains relatively low, atapproximately 10.3%, online revenues grew by 16.4% in constant currency. Withthe online market still in a developmental stage, the group continues toselectively invest in its online platforms. The www.iol.co.za portal is SouthAfrica's leading news, current affairs and classified site and together with thegroup's newspaper titles and other niche sites, now deliver nearly three millionunique visitors per month. The Magazine division (Conde Nast Independent Magazines) had another good year,with Glamour continuing to beat expectations in both copy sales and profits andbecoming the largest contributor to the division's bottom-line. Glamour remainsthe second largest selling fashion and beauty magazine in South Africa, whilstHouse & Garden commands the leading position in the decor and lifestyle market. The Outdoor advertising business, Clear Channel Independent, reported anotherstrong year, delivering a near 20% revenue growth in constant currency andstrong double-digit profit growth. This continued growth was driven through newproduct innovations and formats, general cost containment and an ongoing focuson improving the reach and profitability of its diverse and growing Africanoperations. UNITED KINGDOMOVERVIEW 2007 2006 Change •m •mRevenue 268.1 226.6 +18.3%Operating Profit* 15.5 14.3 +8.4%Operating Margin 5.8% 6.3% -50bps In 2007 the UK's operating profit increased by 8.4% (+9.5% in constant currency)to €15.5 million, reflecting improved profitability in Northern Ireland and areduction in losses in The Independent and The Independent on Sunday titles. UK revenue increased 18.3% to €268.1 million in 2007, driven by strongadvertising growth, up 5.5% in constant currency and the full year impact of theNorthern Ireland distribution business, Wholesale Newspaper Services Limited ('WNS'), which was acquired in 2006. The reduction in the operating margin issolely due to the acquisition of the low-margin WNS distribution business. Total advertising revenue, which was up 5.5% in constant currency, was driven bya 6.5% increase from The Belfast Telegraph against a backdrop of a difficult UKregional advertising market. This robust performance was due to strongrecruitment, property and display advertising. The Independent and TheIndependent on Sunday titles also reported a good advertising performance, up2.1%, mainly as a result of good colour display advertising. In addition to advertising and online revenue growth, this performance alsoreflects the group's 2007 restructuring and cost reduction initiatives in bothLondon and Belfast. This restructuring programme, which began in 2006, wascompleted in 2007 and has resulted in significant headcount reductions, newinternal work flows and other cost reductions. In addition, the implementationof a new state-of-the-art Atex editorial system across the Group has furtherenhanced efficiencies and streamlined the process of syndicating the UKIndependent titles' valuable content to other INM publications across the worldon a more cost efficient basis. Both Independent titles continued to perform well in 2007. Despite the marketdecline in circulation over the last 12 months for the UK national newspapermarket, The Independent has maintained its market share (of c.11.5%) during 2007and The Independent on Sunday has increased its share (to c.8.7%) following are-design of the paper during the year. Readership of The Independent continued to be strong in 2007, with the 12 monthsto September 2007 showing a readership of 787,000, a 6% increase on 2006. Thisrepresents the paper's highest readership figure for a decade. The Independenton Sunday also performed well with a readership of 818,000 (up 2% on 2006), theonly quality Sunday newspaper in the UK to show an increase in readership for2007. The Northern Ireland commercial printing operations continued to grow in 2007with the commissioning of the new Goss FPS dual format printing plant in Newry.This printing facility incorporates a revolutionary new dual heat/cold-setpress, which enables high quality gloss magazine printing. WNS, the largest newspaper and magazine distributor in Northern Ireland,produced a record profit in its first full year within the group, and iscurrently being integrated with Newspread to provide an all-Ireland distributionnetwork and increase efficiencies. Online operations were transformed over the past 12 months with theconsolidation of all online assets under a new management structure and therelaunch of the flagship website, www.independent.co.uk. Across all of theadvertising/editorial websites, unique users grew significantly to a monthly average of 4.7 million in 2007, generating over 30 million page impressions. Much of that core growth came from the expanded classified portfolios- in recruitment (www.LoadzaJobs.co.uk, www.LondonCareers.net, www.CanaryWharfCareers.co.uk and www.CityCareers.com); in motors (www.LoadzaCars.co.uk, whichwas launched at the end of 2007, in conjunction with The Belfast Telegraph'sweekly Carfinder supplement); and in property (www.propertynews.com, the leadingonline property site on the island of Ireland). UK Online revenue, for both thewholly-owned websites mentioned above, together with the group's share ofrevenue from the online associates within the UK Online division (Verivox &Cashcade), reported an increase of 199.3% over the pcp. INDIA Jagran Prakashan Limited ('JPL'), INM's 20.8% owned Indian associate - which islisted on the Mumbai Stock Exchange - recorded a 29.0% increase in revenue to€132.2 million (100%) and a 41.9% increase in operating profit to €28.1 million(100%) for the four quarters ended 31st December 2007. This performance reflects the continuing strong growth of Dainik Jagran, India'slargest selling newspaper and the world's largest read daily newspaper.Circulations have continued to grow as JPL continues to expand its footprint. Inearly 2008, a further six new editions of Dainik Jagran were launched, takingthe total number of daily editions to 37. Reflecting Dainik Jagran's brand strength and extremely buoyant marketconditions, advertising revenue performed very well during 2007, with notablystrong colour and display advertising. Advertising in the last reported quarterto 31st December 2007 was up 29.0% on the pcp. JPL continues to innovate and expand its portfolio of newspaper brands, tocapture yet further growth and market share within the Indian market. JPL haslaunched I-Next, India's first bilingual compact Hindi daily targeted towardsthe young reader. After Dainik Jagran, I-Next has become the most circulatednewspaper, ahead of other mainline dailies, in the cities of Kanpur and Vararsi.JPL has also launched City Plus, a weekly English tabloid launched in theoutskirts of New Delhi. JPL continues to expand its business portfolio and 2007 saw the continuedexpansion of Jagran Engage (Outdoor). In addition, while online penetration inIndia is still in its infancy, JPL has created a new joint venture with Yahoo!(Jagran Yahoo!), which is the largest Hindi-language portal in the world. JPL'smobile online division (J9) also continues to expand rapidly. During 2007, INM's expansion in the Indian market continued with the furtherroll-out of Radio Mantra (in which INM has a 20% stake). Eight radio stations -featuring Hindi-bop - were launched during the year. In a market where radio isstill developing, these launches were greeted with great enthusiasm and receivedsignificant positive feedback. Performances to date have been in line withexpectations. - INTERIM MANAGEMENT STATEMENT - In accordance with the new Transparency Regulations 2007, this InterimManagement Statement is an update on INM's trading performance for the first 11weeks of 2008 (from 1st January 2008 to 14th March 2008) and is the firstInterim Management Statement issued by the Group. • To date in 2008, INM has experienced positive growth in total revenues in constant currency, with all regions showing improvement on last year, despite very strong comparators, particularly in Ireland and South Africa. • Currently, total revenues (in constant currency) are up year-on-year by 2.7%, with: o Group advertising revenue up by 2.1%; and o Group circulation revenue up by 0.5%. • The Group's Associates and Joint Ventures continue to perform well, bolstered by strong growth in our online operations and our Indian associate (JPL). • Costs continue to be well-managed and further work flow efficiencies continue to be identified. • The current performance compares favourably with INM's peer group and reflects the Group's market-leading positions, the strength of its brand franchises, a diverse asset base and a continuing focus on product innovation, which have allowed the Group to record continued earnings growth despite the weak global economic conditions. • As detailed above, in January 2008 the Group announced the acquisition of CCO's 50% interest in CCI - Africa's largest outdoor advertising company. INM has owned CCI as a joint venture with CCO since 2001. This transaction represents a strategic move to take INM's ownership interest to 100%, thereby expanding its outdoor advertising exposure in growing economies, which the Group believes has significant potential. The consideration for this acquisition will be satisfied by the issue of 39 million INM ordinary shares. • The business has traded well through the first three months of 2008, with Group earnings ahead of last year and all regions growing total revenues in constant currency. Despite the uncertain economic background, we remain confident that, on the basis of current trading in all our geographies, INM can deliver a further year of earnings growth. INM expects to announce its Interim results for the half year to 30th June 2008on 27th August 2008. Note Regarding Forward-Looking Statements Some statements in this announcement are forward-looking. They represent ourexpectations for our business, and involve risks and uncertainties. We havebased these forward-looking statements on our current expectations andprojections about future events. We believe that our expectations andassumptions with respect to these forward-looking statements are reasonable.However, because they involve known and unknown risks, uncertainties and otherfactors, which are in some cases beyond our control, our actual results orperformance, may differ materially from those expressed or implied by suchforward-looking statements. These forward-looking statements speak only as ofthe date of this document and no obligation is undertaken, save as required bylaw or by the Listing Rules of the Irish Stock Exchange and/or the UK ListingAuthority, to reflect new information, future events or otherwise. ENDS 27th March 2008 For further information, please contact: Gavin O'Reilly Chief Operating Officer +353 1 466 3200Donal Buggy Chief Financial Officer +353 1 466 3200 MediaPat Walsh Paul Durman/Keith Brookbank Paul KearyMurray Consultants (Dublin) Powerscourt (London) Financial Dynamics (New York)Tel: +353 1 498 0300 Tel: +44 20 7250 1446 Tel: +1 212 850 5600 Investors and AnalystsMark Kenny/ Jonathan NeilanK Capital Source (Dublin)Tel: +353 1 631 5500Email: INM@kcapitalsource.com ABOUT INDEPENDENT NEWS & MEDIA PLC - CORPORATE PROFILE - INM is a leading international newspaper and communications group, with its maininterests in Australia, India, Ireland, New Zealand, South Africa and the UnitedKingdom. Spanning four continents, 10 major markets and 22 individualcountries, INM has market-leading newspaper positions in Australia (regional),India, Ireland, New Zealand and South Africa. In the United Kingdom, itpublishes the flagship national title, The Independent, as well as being thelargest newspaper group in Northern Ireland. Across these regions, the Group publishes over 200 newspaper and magazinetitles, delivering a combined weekly circulation of over 32 million copies witha weekly audience of over 100 million consumers and includes the world's largestread newspaper, Dainik Jagran, in India. The Group has established a strong andgrowing online presence, with over 100 editorial, classified and transactionalsites. INM is the largest radio operator - over 130 stations and an audience of almostsix million people - and outdoor advertising operator in Australasia and alsohas leading outdoor advertising positions in Hong Kong, Malaysia, India,Indonesia and across Africa. The Group has grown consistently over the last 15 years by building ageographically unique and diverse portfolio of market-leading brands, andmanages gross assets of €4.7 billion, revenue of €1.9 billion and employsapproximately 9,600 people worldwide. Further information is available on theGroup's website www.inmplc.com. INDEPENDENT NEWS & MEDIA PLC PRELIMINARY STATEMENT OF RESULTS Group Income Statement Year ended Year ended 31 December 31 December 2007 2006 Notes •m •m Revenue 3 1,673.5 1,635.7 Operating profit before exceptional items 3 349.2 329.5 Exceptional items 4 (37.7) (15.6) Operating profit after exceptional items 311.5 313.9 Share of results of associates and joint ventures 19.3 16.5 Finance costs: 5 - Interest receivable and similar income 10.9 12.0 - Interest payable and similar charges (93.3) (92.3) Profit before taxation 248.4 250.1 Taxation (52.7) (51.7) Profit for the year 195.7 198.4 Attributable to:Minority interests 85.0 79.5Equity holders of the parent 110.7 118.9 195.7 198.4 Earnings per ordinary share (cent) - Basic 6 14.6c 15.7c - Diluted 6 14.5c 15.6c Group Statement of Recognised Income and Expense Year ended Year ended 31 December 31 December 2007 2006 •m •mItems of income/(expense) recognised directly in equityCurrency translation adjustments (63.1) (93.4)Retirement benefit obligations:- Actuarial gains/(losses) 15.1 25.0- Movement on deferred tax asset (2.0) (1.6)(Losses)/gains relating to cash flow hedges (0.7) 4.2Net expense recognised directly in equity (50.7) (65.8)Profit for the year 195.7 198.4Total recognised income and expense for the year 145.0 132.6 Attributable to:Minority interests 82.9 46.1Equity holders of the parent 62.1 86.5 145.0 132.6 Group Balance Sheet 31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006 (IFRS Balance Sheet) (Note 2) •m •m •m •mAssetsNon-Current AssetsIntangible assets 1,805.4 1,800.5 3,549.3 2,863.6Property, plant and equipment 376.5 371.4 376.5 371.4Investments in associates and jointventures 90.0 83.0 125.4 118.9Deferred tax assets 54.7 90.8 56.6 90.8Available-for-sale financial assets 37.0 26.2 37.0 26.2Trade and other receivables 45.9 42.8 45.9 42.8 2,409.5 2,414.7 4,190.7 3,513.7 Current AssetsInventories 16.7 15.9 16.7 15.9Trade and other receivables 298.1 266.3 298.1 266.3Current income tax assets 3.5 15.5 3.5 15.5Derivative financial instruments 0.9 1.8 0.9 1.8Cash and cash equivalents 147.5 104.5 147.5 104.5 466.7 404.0 466.7 404.0 Total Assets 2,876.2 2,818.7 4,657.4 3,917.7 LiabilitiesCurrent LiabilitiesTrade and other payables 274.3 287.6 274.3 287.6Current income tax liabilities 20.1 6.1 20.1 6.1Compound financial instruments - 120.0 - 120.0Borrowings 221.7 59.3 221.7 59.3Derivative financial instruments 3.3 2.0 3.3 2.0Provisions for other liabilities andcharges 27.1 31.2 27.1 31.2 546.5 506.2 546.5 506.2 Non-Current LiabilitiesBorrowings 1,241.5 1,086.4 1,241.5 1,086.4Compound financial instruments - 88.7 - 88.7Retirement benefit obligations 100.4 126.9 100.4 126.9Deferred taxation liabilities 233.5 282.6 - 24.5Other payables 6.4 7.7 6.4 7.7Provisions for other liabilities andcharges 0.8 2.0 0.8 2.0 1,582.6 1,594.3 1,349.1 1,336.2 Total Liabilities 2,129.1 2,100.5 1,895.6 1,842.4 Net Assets 747.1 718.2 2,761.8 2,075.3 EquityCapital and Reserves Attributable to Equity Holders of the ParentShare capital 249.2 229.3 249.2 229.3Other reserves 377.9 329.9 1,827.0 1,346.3Retained earnings (454.9) (360.2) (286.9) (167.8) 172.2 199.0 1,789.3 1,407.8 Minority Interests 574.9 519.2 972.5 667.5 Total Equity 747.1 718.2 2,761.8 2,075.3 Group Cash Flow Statement Year ended 31 December Notes 2007 2006 •m •mCash generated from operations (before cash exceptional items) 336.3 354.8Exceptional expenditure (including restructuring payments) (57.5) (34.9)Cash generated from operations 278.8 319.9Income tax paid (33.9) (51.7) Cash generated by operating activities 8 244.9 268.2 Cash flows from investing activitiesPurchases of property, plant and equipment (65.0) (62.9)Proceeds from sale of property, plant and equipment 18.0 21.6Purchases of intangible assets (70.5) (14.1)Purchases of subsidiary undertakings - (18.4)Cash acquired with subsidiary undertakings - 2.7Proceeds from sale of subsidiary undertaking - 19.2Purchases of associates and joint ventures (1.4) (16.0)Advances to associates and joint ventures (3.4) -Loans repaid by associates and joint ventures 3.6 8.0Purchases of available-for-sale financial assets (11.1) (14.3)Proceeds from sale of available-for-sale financial assets 0.3 4.2Interest received 11.4 8.6Dividends received 7.8 6.3 Net cash used in investing activities (110.3) (55.1) Cash flows from financing activitiesProceeds from issuance of ordinary shares 13.5 14.0Debt issue costs (1.5) (0.8)Interest paid (89.5) (80.2)Proceeds from borrowings 535.7 206.4Repayment of borrowings (172.6) (107.1)Repayment of compound financial instruments (9.9) -Dividends paid to shareholders of the parent (72.6) (76.3)Payment of finance lease liabilities (43.6) (41.2)Purchase of treasury shares (138.3) -Issue of minority interests by subsidiary undertaking 6.8 7.4Dividends paid to minority interests (77.3) (64.9)Purchases of minority interests (35.8) (83.7) Net cash used in financing activities (85.1) (226.4) Net increase/(decrease) in cash and cash equivalents and bankoverdrafts in the year 49.5 (13.3)Balance at beginning of the year 100.7 127.6Exchange losses (4.3) (13.6) Cash and cash equivalents and bank overdrafts at end of the year 145.9 100.7 NOTES TO THE PRELIMINARY STATEMENT OF RESULTS 1. Basis of Preparation of Financial Information under IFRS In accordance with EU Regulations, the Group is required to present its annualconsolidated financial statements for the year ended 31 December 2007 inaccordance with EU adopted International Financial Reporting Standards ("IFRS")and IFRIC interpretations and with those parts of the Companies Acts, 1963 to2006 applicable to companies reporting under IFRS. This financial informationcomprises the Group Balance Sheets as of 31 December 2007 and 31 December 2006and related Group Income Statements, Cash Flow Statements, Statements ofRecognised Income and Expense and related notes for the year then ended ofIndependent News & Media PLC. The preliminary results for the year to 31 December 2007 have been prepared inaccordance with the Listing Rules of the Irish Stock Exchange. The accountingpolicies used in preparing this financial information are consistent with thoseset out in the audited financial statements for the year ended 31 December 2006which are available on the Company's website www.inmplc.com. The consolidatedfinancial statements will be prepared under the historical cost convention andthe measurement at fair value of certain financial instruments. 2. Value of Mastheads - Supplementary Information The "IFRS Balance Sheet" reports the carrying value of newspaper mastheads attheir acquired cost; where these assets have been acquired through a businesscombination, cost will be the fair value allocated in acquisition accounting.The value of internally generated newspaper mastheads or post-acquisitionrevaluations are not permitted to be recognised in the IFRS Balance Sheet and,as a result, no value for certain of the Group's internally generated newspapermastheads (e.g. the three main Irish titles, the Irish Independent, the EveningHerald and the Sunday Independent) is reflected in the IFRS Balance Sheet. In the opinion of the Directors, the presentation of the value of both acquiredand internally generated mastheads is useful information for Shareholders, as itmore accurately reflects the value of the Group's newspaper mastheads. As aresult, the Group has presented an "Alternative Balance Sheet" which includesall of the Group's newspaper mastheads at their revalued amounts, includingthose mastheads that have been created internally with a correspondingadjustment to equity. At 31 December 2007, the Group's newspaper mastheads had a valuation of €3,001.9million compared to a carrying value under IFRS of €1,258.0 million (includedwithin intangible assets of €1,805.4 million). All newspaper mastheads areregularly valued/revalued by expert valuers, Grant Samuel & Associates PtyLimited. The most recent valuation was undertaken as at 31 December 2007 and thevalue of €3,001.9 million included in the Alternative Balance Sheet isconsistent with the most recent valuation by the expert. No provision has been made for Deferred Tax in respect of the Group's intangibleassets (both internal and acquired) in the Alternative Balance Sheet as theGroup believes this deferred tax liability will not arise because it is theBoard's intention to retain these assets. In accordance with the requirementsof IFRS, a deferred tax liability of €235.4 million has been recognised inrespect of the Group's intangible assets in the IFRS Balance Sheet as at 31December 2007. NOTES TO THE PRELIMINARY STATEMENT OF RESULTS (continued) 3. Segmental Reporting Geographical Segment Revenue Operating Profit (Before Exceptionals) 2007 2006 2007 2006 •m •m •m •m Ireland 401.3 404.7 98.3 94.4United Kingdom 268.1 226.6 15.5 14.3South Africa 234.7 262.8 59.1 55.2Australasia 769.4 741.6 192.7 181.1Common costs - - (16.4) (15.5) 1,673.5 1,635.7 349.2 329.5 Exceptional Items 2007 2006 •m •m Ireland (32.1) (8.1)United Kingdom 0.8 (13.1)South Africa (1.2) -Australasia (5.2) (0.4)Common/Unallocated - 6.0 (37.7) (15.6) Operating profit after exceptional items 311.5 313.9 Business Segment Revenue Operating Profit (Before Exceptionals) 2007 2006 2007 2006 •m •m •m •mPrinting, publishing, online,distribution and commercial printing 1,370.2 1,355.1 295.8 281.9Radio 149.5 144.6 51.9 49.7Outdoor advertising 153.8 136.0 17.9 13.4Common costs - - (16.4) (15.5) 1,673.5 1,635.7 349.2 329.5 NOTES TO THE PRELIMINARY STATEMENT OF RESULTS (continued) 4. Exceptional Items Exceptional items are those items of income and expense that the Group considersare material and/or of such a nature that their separate disclosure is relevantto a better understanding of the Group's financial performance. 2007 2006 •m •mIncluded in profit before taxation are the following: Gains/(losses) on sale of assets, net of transaction costs (i) 15.4 17.3 Restructuring charges (ii) (45.9) (32.1) Online and education start-up and other development costs (iii) (7.2) (6.0) Other exceptional items (iv) - 5.2 (37.7) (15.6) (i) Relates to the gain on disposal of investments and properties inAustralasia and the United Kingdom net of costs associated with the unsuccessful APN Scheme of Arrangement and charges relating to the decommissioning of certain property, plant and equipment across the Group. (2006: Relates mainly to the gain on disposal of investments and properties, primarily arising in Australasia.) (ii) Relates to the restructuring of operations in Ireland, UnitedKingdom, South Africa and in Australasia. (2006: Restructuring of operations inIreland, United Kingdom and in Australasia.) (iii) Relates to start-up and other development costs in respect ofonline in Australasia and Ireland and education in Ireland. (2006: Relatesmainly to online start-up costs in Australasia and Ireland and also to otherpromotional expenditure incurred in Ireland and the United Kingdom.) (iv) 2006: Gain on foreign exchange forward contracts related to thereturn of cash from South Africa, net of other exceptional costs. 5. Net Finance Costs 2007 2006 •m •m Interest receivable and similar income (10.9) (12.0) Interest payable and similar charges 93.3 92.3 Net finance costs 82.4 80.3 NOTES TO THE PRELIMINARY STATEMENT OF RESULTS (continued) 6. Earnings Per Share 2007 2006 •m •m Profit attributable to the Parent 110.7 118.9Exceptional items (note 4) 37.7 15.6Tax credit on exceptional items (4.5) (3.3)Minority interest share of exceptional items (0.2) 1.6Profit before exceptional items 143.7 132.8 Weighted average number of shares outstanding during the year(excluding treasury shares) 759,836,469 758,880,670Effect of:Conversion of options 5,185,655 3,140,113Diluted number of shares 765,022,124 762,020,783 Basic earnings per share 14.6c 15.7c Basic earnings per share before exceptionals 18.9c 17.5c Diluted earnings per share 14.5c 15.6c Diluted earnings per share before exceptionals 18.8c 17.4c Basic earnings per share is calculated by dividing the earnings attributable toordinary shareholders by the weighted average number of ordinary sharesoutstanding during the year. For diluted earnings per share, the weighted average number of ordinary sharesoutstanding is adjusted to assume conversion of all potential dilutive optionsover ordinary shares and dilutive cumulative exchangeable preference shares. Thecumulative exchangeable preference shares were not dilutive in 2006. Thecumulative exchangeable preference shares matured on 30 November 2007. Basic and diluted earnings per share before exceptionals are presented in orderto give a better understanding of the Group's financial performance. NOTES TO THE PRELIMINARY STATEMENT OF RESULTS (continued) 7. Dividends - Approved and Paid 2007 2006 •m •mFinal dividend for the year ended 31 December 2006 of €0.083 (2005: €0.07)per share 63.7 53.1 Interim dividend for the year ended 31 December 2007 of €0.0457 (2006: •0.0415) per share 34.0 31.5 97.7 84.6The Directors are proposing a final dividend in respect of the year ended 31December 2007 of €0.0913 per share (€72.1 million). This proposed dividend issubject to approval by the shareholders at the AGM. 8. Reconciliation of Operating Profit before Exceptional Items to CashGenerated by Operating Activities 2007 2006 •m •m Operating profit before exceptional items 349.2 329.5Depreciation/amortisation 36.1 38.3Non-cash share option charge 2.2 2.8Unrealised foreign exchange movements (8.8) (9.7) Cash generated from operations before changes in working capital andprovisions 378.7 360.9(Increase)/decrease in inventories (0.9) 2.3Increase in short term and medium term receivables (23.3) (8.7)(Decrease)/increase in short term and long term payables (5.9) 6.8(Decrease)/increase in provisions (excluding restructuring payments) (3.6) 1.9Retirement benefit obligations (8.7) (8.4) Cash generated from operations (before cash exceptional items) 336.3 354.8Exceptional expenditure (including restructuring payments) (57.5) (34.9)Cash generated from operations 278.8 319.9Income tax paid (33.9) (51.7)Cash generated by operating activities 244.9 268.2 NOTES TO THE PRELIMINARY STATEMENT OF RESULTS (continued) 9. Analysis of Changes in Equity 2007 2007 2007 2006 2006 2006 •m •m •m •m •m •m Parent Minority Total Parent Minority Total At 1 January 199.0 519.2 718.2 173.0 578.4 751.4Issue of share capital 145.1 79.7 224.8 22.3 23.3 45.6Share based payment 2.0 0.2 2.2 1.8 1.0 2.8Dividends (including minorityinterests) (97.7) (77.3) (175.0) (84.6) (64.9) (149.5)Buyback of shares held by minority - (27.8) (27.8) - (64.7) (64.7)Purchase of treasury shares (138.3) - (138.3) - - -Acquisition of minority interest - (2.0) (2.0) - - -Total recognised income and expensefor the year 62.1 82.9 145.0 86.5 46.1 132.6At 31 December 172.2 574.9 747.1 199.0 519.2 718.2 10. Statutory Accounts This financial information is not the statutory accounts of the Company and theGroup, a copy of which is required to be annexed to the Company's annual returnto the Companies Registration Office in Ireland. A copy of the statutoryaccounts in respect of the year ended 31 December 2007 will be annexed to theCompany's annual return for 2007. Consistent with prior years, the fullfinancial statements for the year ended 31 December 2007 and the audit reportthereon will be finalised and circulated to shareholders at least 20 workingdays before the AGM. A copy of the statutory accounts required to be annexed tothe Company's annual return in respect of the year ended 31 December 2006 hasbeen annexed to the Company's annual return for 2006 to the CompaniesRegistration Office. This information is provided by RNS The company news service from the London Stock Exchange