INM revenues down by 2.2% in year-to-date

Independent News & Media has reported that its group revenues are 2.2% down for the year to date, when measured on an annualised basis.

In an interim management statement, covering the year up to the end of last week, INM said yesterday that circulation revenues are down by 2.7%, on a year-on-year basis and that total print advertising revenue is down by 3.4% on the same period last year. The latter figure compares to a drop of 2.7% for the first six months of this year, while the circulation revenue decline also shows an easing, as this was down 2.4% in the first half of the year.

Moreover, management noted that its operating costs reduced by 2.9%, despite a “substantial investment” in digital activities and it said that when the impact of the closure of its Northern Ireland free-sheet business is adjusted for, underlying total advertising revenues, for the period, covering both print and online avenues actually increased by 0.4%.

“Year-to-date trading trends, since the announcement of the group’s interim results on August 28, have remained broadly unchanged,” INM said.

Those figures showed total revenue of just under €158m for the first half of the year, marginally down on the prior year, with pre-exceptional operating profits in line, at €15.9m.

Yesterday’s update marks the second consecutive generally downbeat interim management statement from INM. Back in May, the group reported that total group revenues, in the first 20 weeks of 2014, were down by nearly 3% on an annualised basis.

That review added that, in that time period, total newspaper advertising revenues dipped by 2.4%, but digital ad revenue — albeit relatively small at this stage, increased by just under 18%, while total circulation revenue was down by 2.5%.

However, yesterday’s update was relatively well received by the analyst community. Davy Stockbrokers said it was “relatively encouraging”, with pick-ups in advertising and cost cutting more than off-setting deteriorating circulation trends. In August, the company said it would shed another 13 jobs, as part of its ongoing restructuring programme.

“INM continues to reduce operating costs, which have fallen 2.9% in the year to date, despite a substantial investment in digital activities. Profitability has increased marginally year to date versus flat in the first half, as continued cost savings more than offset revenue declines and investments in digital. We are likely to make some minor adjustments to our numbers following this release. In particular, we will be revising up our online advertising revenues,” noted Davy analyst, John Stokes.

“Overall, the statement from INM highlights many of the same trends continuing, year-on-year, with print and circulation revenue delivering declines, highlighting structural pressures in the newspaper market,” Rachael Cairns of Goodbody Stockbrokers said.

“However, the ongoing strong growth in online advertising is encouraging, which has helped the overall advertising performance.

“In addition, seeing the cost savings benefits coming through in the numbers is a positive. At first glance, we don’t expect to make any significant changes to numbers, but we will review following speaking with management,” Ms Cairns added.

INM’s share price was down by just over 2%, yesterday, at 14c.


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