INDEPENDENT NEWS & Media (IN&M) returned to the black in the first half of this year in spite of a continuing steep decline in advertising revenues in Ireland, its biggest market.
The group made a pre-tax profit of €63 million for the six months to the end of June, including exceptional items. It made a loss of €48.5 million in the same period of 2009.
Advertising revenue in Ireland declined by 12.4 per cent in the six months, although this was less than the 36.2 per cent reverse recorded in the comparable period last year.
Chief executive Gavin O’Reilly said the trend recently has been positive. “The summer months were better than we had anticipated and it was mostly retail and brand advertisers,” he said, adding that advertising sales were still down “mid single digits” this year.
Total revenue from Ireland in the first six months was €204.1 million compared with €210.1 million in 2009. Its operating profit was flat at €26.5 million.
In South Africa, revenue fell by 2.8 per cent to €99.6 million while operating profit was up 1 per cent to €21 million.
Australasia produced the strongest result. Revenues rose by 27 per cent to €332 million while operating profit was up almost 41 per cent to €57.8 million.
IN&M reduced net debt by €65.5 million to €978.5 million by August. Its recourse debt – when the liabilities of its Australian associate APN are excluded – amounted to €510.6 million.
IN&M sold its remaining stake in Indian media group JPL this year, raising €74 million. It also sold its Independenttitles in the UK. These made an operating loss of €5.2 million in the four months under IN&M's ownership.
“We have sold all the assets that we want to sell,” Mr O’Reilly said.
When asked if there was room in the Irish market for so many national titles given the contraction in the economy, Mr O’Reilly said: “I won’t be surprised if there aren’t some casualties. It may be UK publishers folding their tent and saying ‘it’s been rather interesting, our exploit in Ireland’.
“I think at regional newspaper level it is more likely there could be one or two casualties there. The growth of [regional] titles over the last four or five years bore no resemblance to the actual market. That’s going to correct itself.”
Mr O’Reilly added that “all of our regional titles are profitable”.
He is also "optimistic" that the Sunday Tribune's move to a tabloid format would "rejuvenate the title", which shed 17.2 per cent of circulation in the first half of this year.
"There is room and relevance for the Sunday Tribune. It has had a very tough time. I'm not going to say it will reverse all the circulation decline because of the way the market is. [But] I'd be optimistic the relaunch will be successful."
Mr O’Reilly described relations with Denis O’Brien, IN&M’s biggest investor, once seen as a “dissident” shareholder, as “good”.
“I don’t think there are any different points of view now,” he said. “There’s actual harmony now.”
He described Mr O’Brien’s recent share buying as a “great vote of confidence”.
