INM remains upbeat on South African sale but warns on costs
INDEPENDENT News & Media said it remains upbeat about the interest in its South African business which is for sale, but has warned that challenges remain in its main markets.
The publisher of this newspaper said it has appointed Investec and Hawkpoint to review its options in relation to the South African business and has been encouraged by the interest shown by a number of parties "as it ascertains whether a disposal is deliverable on acceptable terms in the best interest of the company".
The company said in a management statement last night that total group revenues fell by 3pc in constant currency terms in the first 45 weeks of the year. Advertising revenue was down by over 5pc, while operating costs have been reduced by 0.7pc, despite inflationary pressures in South Africa.
INM added that the company's high debts mean there is a need for substantial and urgent restructuring.
Savings have already begun with the relocation of the firm's headquarters to central Dublin, as well as cost-cutting reorganisations at the 'Belfast Telegraph' and the 'Sunday World' and, more recently, at its printing plant at Citywest in Dublin.
Discussions with lenders, in a bid to refinance bank debt in advance of its maturity in May 2014, are ongoing and constructive, it added.
"The group's franchise remains relevant and resilient," said INM in a statement. "INM has a strong portfolio of market-leading and profitable titles and a growing digital revenue stream."
Like most media companies, INM is struggling to deal with the twin challenges posed by new technology and falling advertising sales as economic problems deter some companies from advertising.
"Against this continued backdrop, and the group's significant level of debt, the need for substantial and urgent restructuring is evident," the company said.