18 Nov 2011 07:00
INTERIM MANAGEMENT STATEMENT
Ticker: (Bloomberg) INM.ID/INM.LN and (Reuters) INME.I/INME.L
Dublin/London, 18th November 2011: Independent News & Media PLC ('INM' or the 'Group') today issued its Interim Management Statement ('IMS') in accordance with the Transparency Regulations 2007. The IMS provides an update on INM's trading performance for the year-to-date (45 weeks to 11th November 2011), and in particular for the period since 1 July, 2011, and includes an outlook for the remainder of the year.
PERFORMANCE REVIEW
The underlying (excluding the UK Independent titles disposed of in April 2010) year-on-year performance, in constant currency terms, for the 45 weeks to 11th November 2011 is as follows:
·; Total Group Revenues declined by 5.6%
·; Total Advertising Revenues declined by 6.4%
·; Total Circulation Revenues declined by 1.6%
·; Operating Cost reduction of 3.2%
·; Net Debt reduction of approximately €40 million since 31st December 2010
Trading conditions since the announcement of the Group's 2011 First Half Results on 26th August have remained erratic and heavily influenced by macro-economic uncertainty, particularly in the Eurozone. Against that backdrop, all of INM's market-leading publications remain profitable and cash generative and Group Net Debt reduction for the year remains firmly on target.
The export-led recovery out of Ireland's prolonged recession has yet to translate into increased confidence among consumers, who continue to save rather than spend, in anticipation of further scheduled austerity measures and tax increases. While the Eurozone debt crisis continues to weigh particularly on the Island of Ireland operations, the global contagion has also impacted on consumer confidence in South Africa, where advertising growth has been somewhat less pronounced than anticipated.
Overall, and while there has been some recent moderation in the negative trends experienced in both year-on-year Group advertising and circulation, visibility still remains poor. Year-to-date Group advertising revenue is currently 6.4% behind last year (compared to 7.3% behind in H1 2011) while Group circulation revenue is currently 1.6% behind 2010 (down 2.1% in H1 2011). Stringent controls and a continued focus on cost efficiencies have substantially mitigated the impact of these reduced revenues. Operating Costs in the Island of Ireland division have been reduced by 5.9% in constant currency terms despite a 31% year-on-year increase in the price of newsprint. INM's South African operations have experienced cost increases of 3.5% despite much higher inflationary cost pushes.
APPOINTMENT OF NEW CHAIRMAN
On 24th October, INM announced the retirement of Dr Brian Hillery as Chairman and from the Group's Board. He was succeeded by Mr James Osborne who was appointed by the Board following an independent search conducted by Lamarck, a London-based specialist advisory firm.
Mr Osborne is a former Managing Partner of A & L Goodbody Solicitors. He is the current Senior Independent Director at Ryanair, a non-executive Director of James Hardie Industries and Chairman of Eason and Son, a private company.
OUTLOOK FOR REMAINDER OF 2011
Market conditions in both Ireland and South Africa remain challenging. Since the Group announced its 2011 first half results, there has been some positive moderation in advertising trend lines. However, the anticipated seasonal lift in advertising in H2 has not fully materialised due to the negative effects of the continuing recession and unprecedented Eurozone political and economic crises.
Given the continuing weakness in broader market conditions and still-poor advertising visibility, we expect full year operating profit in 2011 to be in the range of €74 million to €78 million, with strong cash management ensuring debt pay-down in line with the Group's stated objectives.
INM's market-leading assets are well positioned to benefit from a cyclical economic recovery, when it occurs. As market conditions improve, the Group's strong operating leverage, enhanced by the significant and sustainable operating cost reduction delivered over the past three years, should convert any incremental revenue growth into an improved operating profit performance, enhanced cash flow conversion and further debt pay-down.
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some statements in this announcement are forward-looking. They represent our expectations for our business and involve risks and uncertainties. We have based these forward-looking statements on our current expectations and projections about future events. We believe that our expectations and assumptions with respect to these forward-looking statements are reasonable. However, because they involve known and unknown risks, uncertainties and other factors, which are in some cases beyond our control, our actual results or performance may differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements speak only as of the date of this document and no obligation is undertaken, save as required by law or by the Listing Rules of the Irish Stock Exchange and/or the UK Listing Authority, to reflect new information, future events or otherwise.
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For further information, contact:
Karl Brophy Director Corporate Affairs Independent News & Media PLC +353 1 466 3200 (office) +353 86 047 1951 (mobile) | Investors and Analysts Mark Kenny/Jonathan Neilan FTI Consulting +353 1 663 3686 Email: INM@fticonsulting.com
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CORPORATE PROFILE
Independent News & Media PLC (INM) is a leading international newspaper and media group. Its main interests are located in the Republic of Ireland, Northern Ireland and South Africa.
The Group has market-leading newspaper positions in the Republic of Ireland, Northern Ireland and South Africa and has established a strong and growing online presence, including market-leading online positions in each of its main markets with over 70 editorial and classified sites. INM is the largest newspaper contract printer and wholesale newspaper distributor on the Island of Ireland.
In Australasia, the Group has a 30.4% investment in APN News & Media Limited - which is quoted on the ASX (Sydney). APN is the largest newspaper publisher in New Zealand and leading regional publisher in Australia. It is also Australasia's largest outdoor advertising operator and radio operator, with over 140 stations. APN also has leading outdoor advertising positions in Hong Kong and Indonesia.
From its newspaper origins in Ireland, INM has grown and evolved to become a geographically and media diverse group with market-leading brands. As at 31 December 2010, INM managed gross assets of €739 million and revenue of €605 million and employed approximately 2,800 people worldwide.