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Independent News profits tumble

Aug 31 2012 09:00 Reuters

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Dublin - Publishing group Independent News & Media (INM) posted a 26% year-on-year fall in operating profit in the first six months of the year that saw changes to the ownership of the company and senior executives resign.

Telecoms billionaire Denis O’Brien tightened his grip on INM earlier this year by increasing his stake to 29.9%, pressuring chief executive Gavin O’Reilly into resigning and leading a shareholder revolt that also ousted the company’s chairman and finance chief. 

O’Reilly’s departure ended his family’s 30-year control of Ireland’s largest media company and years of bitter squabbling between O’Brien and the O’Reilly family.

New CEO Vincent Crowley said the to-ing and fro-ing took place against the backdrop of a tough six months for the group.

“The first half of 2012 offered no respite from the difficult trading conditions in which INM operates. Weak economic conditions prevailed in Ireland, while the South African economy experienced multi-year lows in both consumer and business confidence,” Crowley said in a statement. 

“Early trading in H2 suggests a continuation of the trends experienced in H1. Forecasting operational performance for the latter half of 2012 is challenging as visibility is very short term.”

INM posted an operating profit of €25.4m in the six months to end-June compared with €34.5m a year ago and the €155m it made in the first half of 2007 before Ireland’s financial crisis hit the highly-leveraged group hard.

Revenues, split in a ratio of two-to-one between Ireland and South Africa, fell 4.4% to €272.2m after advertising spend dropped by roughly the same amount with an almost 10% fall recorded in Ireland.

The group has reduced its debt by just under one percent since the end of last year. It still stood at €423.3m despite the group swapping debt for equity to secure its future three years ago.

INM said in July that following a number of approaches, it was looking at a possible sale of its South African unit.

On Friday it said it would now ascertain if it could sell the business on “attractive terms.”

Crowley said the company’s focus in the second half of the year would be on developing its strategy to cut debt, looking at further cost cuts and attempting to address the large pension deficit that increased again in the first half of the year.  

Independent News has radically restructured in the last three years, selling its flagship UK title the Independent and media interests in India and shutting loss-making newspapers in Ireland.

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