INM forecasts further growth after earnings soared by 14pc last year
INDEPENDENT News and Media (INM) enjoyed a 14pc jump in operating profits last year and forecast that earnings will grow again this year despite tough market conditions.
INM said yesterday it posted operating profits of €87.9m in 2010. On an underlying basis, revenues for the year rose by 3.3pc to €605.3m, while core net debt was reduced by €100.2m.
"The last year has been hugely significant for INM. After an extremely difficult 2009, we achieved what we said we were going to achieve in 2010. We recorded growth in underlying group revenue and good growth in Ebitda [earnings before interest, taxes, depreciation and amortisation]. Importantly, we reduced our core net debt by 17.5pc," INM chief executive Gavin O'Reilly said.
Gavin Kelleher, a media analyst with Goodbody Stockbrokers, said the latest set of results showed positive signs on deleveraging.
"The group reduced net debt by over €100m in 2010. The market will be looking for further deleveraging and the group seems to be focused on doing this," he said.
Underlying advertising sales, which represents 41pc of group revenue, was down 6.9pc. Circulation revenue, which represents 28pc of group revenues, fell by just 2pc.
The company said it had seen a 'significant' increase of about 20pc in newsprint prices in the Irish market in 2011, but this has been offset by continuing cost reductions across the group.
"Advertising conditions remain challenging and, while visibility remains short, we are not anticipating any material advertising uplift in 2011," Mr O'Reilly said.
"Assuming more normalised advertising conditions, easier comparatives, continued cost vigilance and having eliminated loss-making businesses, we are targeting a further improvement in operating profit for the year," he added.
The publisher's Irish division, which operates on both sides of the Border, saw revenues decline by 3.6pc to €399.1m, while operating profits rose by 1.3pc to €53.9m. The company said the Irish operation's performance was one of the key ingredients in driving the 2010 performance.
A contraction in advertising revenues seen in 2009 continued in 2010 but at a slower rate. INM said recruitment advertising was surprisingly resilient in 2010 despite the economic conditions.
The publisher of this newspaper also announced plans to bolster its online presence. Former 'Sunday Tribune' editor Nóirín Hegarty has been appointed online editor of Independent.ie, while the group also plans to launch coupon service GrabOne in Ireland in the next three months.
The joint venture with Australian media group APN -- in which INM holds a 31.6pc stake -- has already had some success in the Australasian markets.
INM also plans to launch a new jobs portal in the same period of the year, with technology provided by Stepstone, combining all of INM's jobs boards. And a deal for a 50pc share in car sales site carsireland.ie will be completed in April.
Chief executive of INM's Irish division, Joe Webb, said despite a still challenging ad market, the group enjoyed a strong year online, recording 3.2 million unique users a month for independent.ie, which represents a 39pc increase year-on-year.
"We're very happy to be in a position to launch, what we believe, will become Ireland's best jobs portal in conjunction with international industry leaders, Stepstone."
Mr Webb said Ms Hegarty would continue to build on the success and develop an even more dynamic online offering.
"The online expansion is a positive, but the market will now look for online revenues to grow significantly as a proportion to the overall group revenue," Mr Kelleher said.
In contrast to Johnston Press, whose shares fell as much as 10pc earlier this month when that publisher released full-year results, shares in INM ended the day unchanged at 59c yesterday.