Post-Brexit uncertainty means INM won't rush deals
The head of Independent News & Media (INM) has said the group won't rush its strategy of buying international digital-media assets.
On Friday, INM - publisher of this newspaper - reported a profit before tax of €18.5m for the six months to the end of June 2016. The company's cash balance at the end of June was €62.4m and it is set to increase further by the end of the year.
Directors have said they are not proposing to make a dividend payment in 2016 but instead are focused on using the company's growing cash pile for investment, including potentially large-scale acquisitions of digital business outside Ireland.
Group chief executive Robert Pitt said the search for deals was focused outside Ireland and away from traditional media.
"We need scale, which is difficult to find (in the home market) but geographically it is good to de-risk from Ireland. That is the reason we are looking elsewhere," he told reporters.
In a market where consolidation is happening, he said INM is a buyer.
"We have cash, we have cleaned up our balance sheet. The business as a whole has demonstrated that it is managed professionally and can maximise revenue lines and grow and develop new businesses," he said.
With cash on hand and the ability to borrow, INM has a capacity of around €119m for takeovers, said Mr Pitt.
"We are not looking for small start-ups. We are not looking at businesses that need management turnarounds," he said.
The UK has been the focus for potential deals, but Mr Pitt said June's Brexit vote meant there was now an added complication.
"Brexit means we have to be a bit more careful," he said.
On the other hand, the decline of sterling associated with that vote means that INM's funds are now worth more.
The impact of Brexit on rival buyers there may also benefit INM, said Mr Pitt.
"If we decide wisely, we should be successful; we just need to be more careful in the UK."
Deals beyond the UK are also possible, he said.
Having ridden out the crash here, INM would bring operational excellence, as well as finance, to any new acquisition, he pointed out.
INM's first-half results show overall revenues grew by 2.7pc in the period to reach €162m.
Profits were bolstered by growth in digital advertising revenue, which was up 23.4pc at the end of June, compared to a year earlier, as well as a €2.2m cut in interest costs.
Sunday Indo Business