Independent News & Media looks at cash options

Independent News & Media is confident of securing bank funding to help it make further acquisitions.

Independent News & Media looks at cash options

INM cleared its debt mountain, which stood at €420m just three years ago, with the sale of its stake in Australia’s APN News & Media group earlier this year.

At that time, it said it was keen on boosting its growing digital operations via acquisition. With €35.4m of net cash now available, analysts view INM being in a position to pursue takeover targets and/or return cash to shareholders.

Speaking on the back of a decent set of interim results, yesterday, group chief executive, Robert Pitt said: “INM has cash at its disposal and believes it can source additional funding, from banks, where acquisitions make sense.

“Management are carefully considering how best to invest shareholders’ cash.

"It is key that any acquisition would be in a channel where long-term growth is seen.”

It is understood that while no immediate acquisition target is being sized up, the group is open to options.

While circulation volumes and revenue declined in the first half, a pick-up in digital advertising off-set a drop in income from print operations.

Overall, INM’s total revenue for the first half of the year amounted to €157.3m; down by €500,000 on the same period last year.

However, pre-tax profits grew by 13.5%, year-on-year, to €15.1m and net asset value was up by 43% to €27.6m.

INM’s total advertising revenues rose by nearly 3%, year-on-year, in the first half, with digital ad revenue growing by nearly 44%, “more than offsetting the marginal decline in publishing advertising revenue,” the company said.

Management said it is reviewing its balance sheet, as a matter of good corporate governance, to ensure INM is “optimally structured for its future growth”.

Operating costs were reduced by 0.7% in the first half and the integration of the group’s print and digital news operations is likely to deliver further efficiencies. Further headcount reductions, however, have not been ruled out.

“While today’s results are very encouraging, there is still a lot of work to do to make sure the business is safeguarded for the future,” Mr Pitt said yesterday.

“Management will continue to address costs and reorganise the business for the challenges it faces.”

INM also said its full-year performance should meet expectations.

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