Independent News and Media eyeing more buys

Independent News and Media (INM) is “actively” pursuing more acquisitions in a bid to support a good first-half performance driven by a 23.4% annualised increase in digital advertising revenue.

The publishing group’s chief executive Robert Pitt said yesterday that it is INM’s belief that “further consolidation is necessary in the industry in order to protect shareholder value and the viability of smaller publications”.

The group recently completed the full purchases of car sales website and Belfast-based magazine publisher Greer Publications and said it “continues to actively review potential acquisition opportunities that generate attractive returns on capital and represent a strategic fit to the group.”

INM yesterday reported on what management called a good performance for the first half of the year, despite a challenging market backdrop. 

First-half revenues were up by 2.7%, year-on-year, at €161.6m; with pre-tax profits ahead of the same period last year by 22.5% — on a pre-exceptional basis — at €18.5m.

Mr Pitt said the outlook for the second half of the year is still “challenging”, particularly in print advertising, but added that management will continue to deal with the challenges “pro-actively”.

“Underlying operating profit growth of 3.1% better reflects the challenges the industry and INM face,” he added.

While INM saw a healthy increase in digital advertising revenue during the period, publishing advertising revenue fell, year-on-year, by just under 8% and circulation revenue was down by 5.4% on the same period last year.

That said, the value of the group’s net assets grew by almost €10m, to €37.3m, year-on-year, and it ended the first half with an increased cash balance of €62.4m, mainly generated from a strong EBITDA performance. Use of that cash will be key to INM’s growth, according to analysts.

“INM has diversified its revenue stream to ensure that earnings growth prevails despite the continued decline in print,” said Robert Stokes of Davy Stockbrokers.

“It is hard to look beyond the staggering cash balance of the group... 35% of its current market cap. Capital allocation is crucial and management’s ability to create value from this cash pile will determine the future trajectory of the group.”


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