Thomas Crosbie Holdings projects return to profit in 2011

IRISH Examiner owner Thomas Crosbie Holdings Limited (TCH) has written down the value of a number of media brands acquired over the last 15 years by €30 million.

Accounts to be filed with the Companies Registration Office show TCH recorded a pre-tax loss of €38.2m (2008 €3.5m) for the 53 weeks in the year ended January 3, 2010.

The bulk of the losses arise from the writing down of the company’s €56.8m investment in newspapers and radio brands purchased over the last 15 years. TCH said the cost of fundamental reorganisation in 2009 was €32.2m (€2.3m), including a brand impairment charge of €30.1m. This follows a review by the directors of the carrying value of the group’s brands.

“This brand impairment charge is a non-cash accounting adjustment arising from writing down the value of brands acquired since 1995. This is consistent with the impairment charges experienced by all other major media companies operating in Ireland today,” the company said in a statement.

The group said it expects to return to profit in 2011 and anticipates an operating loss in the current year. This is expected to have a cash effect of €3m which will be funded from TCH’s cash reserves.

The company recorded sales of €82.5m (€106.13m) in the period and operating losses before interest and taxation was €2.95m (€75,683). The company paid dividends of €1.12m (€3.83m) in 2009.

TCH interim chief executive Tom Murphy said 2009 was a very difficult year for the media industry in Ireland, as it has been for all sectors of the economy.

“Newspaper advertising revenues across all sectors and titles have experienced declines, fundamentally as a result of the stagnation and decline of economic activity in Ireland.

“TCH has continued to fund and implement its cost-reduction programmes and this activity, which continues in 2010, is yielding significant savings.

“TCH expects to be loss-making in 2010 but on completion of its cost-reduction programmes expects that the savings achieved on headcount reduction, pay and other operating cost reductions, and the disposal of loss-making activities, including the disengagement from unprofitable minority investments, when combined with revenue generating initiatives, will return to profitability in 2011,” he said.

TCH chairman Alan Crosbie said the media in Ireland is facing a perfect storm of global recession and reduced consumer spending.

“In this environment, media which is an early indicator of the overall health of the economy, has to restructure its cost base to the levels of business available to it and prepare its products and people for the upturn that is around the corner. In TCH we are very lucky to have the commitment and support of very hardworking people at all levels in our group that are up for these challenges,” he added.

Staff numbers employed by TCH fell from 802 to 711 at the end of January. Staff costs fell from €43.14m to €39.34m in the period under review. The accounts show directors remuneration fell to €1.1m, down from €1.28m a year earlier. TCH had total bank debt of €26.64m at the beginning of January, down from €27.4m a year earlier. The group held cash equivalent investments of €7.58m (€7.16m).