INDEPENDENT NEWS & Media (INM) has cut its full-year operating profit guidance citing continued “challenging” conditions in the sector, but said advertising revenue was beginning to stabilise.
In a trading update, the group also said a restructuring of its overdue debt and shareholder structure would ultimately position the group for growth.
The company revised its forecast for full-year operating profit before exceptionals to a range between €170 million to €190 million. That was down from a forecast at the lower end of €180 million-€210 million in August, and €200 million-€230 million estimated in April.
“The advertising trends experienced in September and October remain challenging and are expected to continue for the remainder of 2009,” the group said in a note.
Shares in INM fell to 20.4 cent after the statement was released, but closed the day at 21 cent.
“Operating conditions for the company clearly remain very difficult,” Bloxham Stockbrokers said in a note. However, operating profit before exceptional items and in constant currency terms for the year to date was estimated to be about 37 per cent behind last year, compared with a 44.8 per cent fall in the first half of 2009, the publishing group said.
“This improved operating profit performance on the first half resulted from the stabilisation in advertising revenue and continued strong cost management across all regions,” it said. Advertising revenue was down 19 per cent, compared with a 19.6 per cent decline reported at the end of the first half. Circulation revenue was down 2 per cent.
INM will hold a meeting on November 10th of holders of its overdue €200 million bond to approve a restructuring plan that could give them a 47 per cent stake in the publishing group and which is being opposed by major shareholder Denis O’Brien.
“Clearly, this remains the key short-term challenge to the stock,” Goodbody analyst Gerry Hennigan said.
In August, the company announced that revenues fell by 14.9 per cent during the first six months of 2009 on the back of a 19.6 per cent decline in advertising revenues. – (Additional reporting, Reuters)
