Boost in ad revenue helps lift INM profit to €94.6m
Good start to 2010 as asset disposal contributes to net debt reduction of €360m
An improvement in advertising trends and a strong cost-management plan helped lift Independent News and Media's (INM) operating profit by 29pc to €94.6m during the first six months of the year, the company revealed yesterday.
INM, which publishes this newspaper, grew revenues for the period ending June 30, 2010, by 7.8pc to €656.5m.
The disposal of some assets, including South African outdoor and its stake in Indian publisher JPL, contributed to a net debt reduction of €360m.
The company reported an improvement in revenues across all its markets, with Australia putting in a particularly strong performance. In Ireland, profit rose slightly, despite a 3.3pc fall in like-for-like revenue to €204.1m.
Goodbody media analyst Killian Murphy described INM's results as "better than anticipated".
"The most encouraging element is the improvement in advertising revenue across the board.
"South Africa remains strong. Australasia always performs stronger in the second half of the year, and we expect APN outdoor to perform strongly," he said.
"The market is focused on cash generation and this is strong with a large decrease in recourse debt."
Mr Murphy said INM continued to win market share in all its sectors, and, with a decreased cost base, the group was well positioned to benefit from any economic recovery.
"With the strong cash generation, we forecast a strong share price appreciation over the next year and forecast a share price increase 60pc over the next 12 months."
INM chief executive Gavin O'Reilly said the group had a good start to 2010.
"All of our segments have contributed positively to our strong operating performance in the first half, with substantial operating leverage delivering double-digit year-on-year improvements in operating profit," he said.
Positive year-on-year advertising trends, as well as solid performances in circulation and other revenues, have continued to improve through the opening months of the second half.
"That growth has delivered further reductions in net debt, which has reduced by €360m since June 2009 as part of our continuing focus on deleveraging," Mr O'Reilly added.
He said the group was confident for the rest of the year, and was targeting an improved operating performance in line with current market expectations.
"Profits for H2 to date continue to be well ahead of last year. This gives us confidence for the balance of 2010, and, assuming a continuation of these positives, we are targeting an improved operating performance for the year, in line with current market expectations."
The company's shares were unchanged yesterday in trading on the Dublin market and closed at 66c.