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13 May 2011 08:00
INM ISSUES INTERIM MANAGEMENT STATEMENT
Ticker: (Bloomberg) INM.ID/ INM.LN and (Reuters) INME.I/ INME.L
Dublin/London 13th May 2011: Independent News & Media PLC ('INM' or the 'Group') today issued its Interim Management Statement ('IMS') in accordance with the Transparency Regulations 2007. This IMS is an update on INM's trading performance for the year to date.
Year to Date Performance
INM's year-on-year (for the 18 weeks ended 6th May 2011) underlying Revenue and Operating Cost trends are broadly in line with those for the first 11 weeks of 2011 that were announced as part of the 2010 Full Year Results Announcement on 22nd March 2011. The comparative year-to-date results for 2010 exclude Revenue and Costs of the (London) Independent titles, which were disposed of at end-April 2010, to show the underlying Group performance.
In constant currency terms, the underlying performance shows Total Group Revenue down 5.1% year-on-year (-2.8% in Euro terms) with Total Advertising Revenue down by 7.9% (-4.5% in Euro terms) and Total Circulation Revenue 1.5% down (+0.5% in Euro terms) on the same period in 2010.
April performance was impacted by an unusually high number and confluence of public holidays in each of our markets, with normal business patterns disrupted around the Easter period. However, normal trading patterns now appear to be returning and the Group's leading titles continue to focus on maximising market share.
Operating Costs continued to be well managed, despite the significant newsprint price increases (c. 20%), as foreshadowed in March. Significantly, total underlying Group operating costs are down 1.9% in constant currency terms (flat in Euro terms) year-on-year, reflecting prior year efficiencies flowing through as forecast. In addition, the Group continues to invest for growth, and particularly in its online footprint, with the imminent launch of grabone.ie (discount shoppers site) in Ireland and further enhancements to independent.ie.
In the first 18 weeks of 2011, the Group generated Free Cash Flow of €27.3 million, thereby reducing Net Debt to €446.3 million, compared to €473.6 million at end of 2010.
Key Events
There have been no new significant events within the Group in the year-to-date, other than those events announced as part of our 2010 Full Year Results Announcement on 22nd March and APN News & Media Limited's ('APN') trading update on May 3rd. This update by APN detailed the financial impacts of recent natural disasters which occurred in Q1 2011, within six weeks of each other, in two of APN's most important markets, Queensland and New Zealand. APN has indicated that this extraordinary coincidence of these natural disasters would have a H1 EBIT impact of AUS$15-$20 million. Notwithstanding such a difficult start to 2011, APN has indicated that its Outdoor and Radio divisions continue to trade ahead of the prior year and overall trading is anticipated to improve in the second half, although it is not expected that the full year result will match APN's 2010 earnings. This return to positive earnings growth will ensure the continuity of dividends and, most importantly, enable the pursuit of growth-orientated initiatives. INM has a 31% shareholding in APN and will report its share of APN's results as part of Share of Associates and Joint Ventures in 2011.
Outlook for 2011
As the Group reported on March 22nd, advertising conditions still remain challenging and the market in Ireland has yet to stabilise and remains very short-term and erratic. This has been off-set in part by better advertising conditions in South Africa. However, overall advertising visibility also remains relatively short-term, making forecasting, in Ireland in particular, difficult. The Group notes the progressive Jobs Initiative just announced this week by the Irish Government - delivering a lower VAT rate on newspapers from July 2011 - which should provide some further stimulus for the Irish consumer.
Assuming more normalised Group advertising conditions, the easier comparatives in H2, continued cost vigilance and having eliminated loss-making businesses, we continue to target a year-on-year improvement in Group Operating Profit for the year, coupled with further meaningful deleveraging.
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.
ENDS | 13th May 2011 |
For further information, please 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 K Capital Source (Dublin) Tel: +353 1 663 3680 Email: INM@fd.com | |
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