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INM shares soar by 8.7pc after surprise upbeat forecast for 2008

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Vincent Crowley, INM (Ireland) chief executive, answers questions
after the firm revealed its preliminary results for 2007

Vincent Crowley, INM (Ireland) chief executive, answers questions after the firm revealed its preliminary results for 2007

Vincent Crowley, INM (Ireland) chief executive, answers questions after the firm revealed its preliminary results for 2007

Shares in Independent News & Media (INM) soared by 8.7pc yesterday after the company surprised the market with an upbeat outlook statement for 2008.

The stock's biggest one-day rise in eight years came after Gavin O'Reilly, INM's chief operating officer, said group revenue had risen by 2.7pc in local currency terms in the first three months of this year and forecast "low-to-mid-single-digit" profit growth in 2008.

Mr O'Reilly said: "I think that will be somewhat of a surprise to the market because some people (UK analysts) were talking about double-digit declines."

INM, which publishes the Irish Independent, said advertising revenue in Australasia, its largest market, had increased by 4pc. Investors also took solace from the fact that while advertising in the Irish market was down 4.7pc, this was entirely property related.

Vincent Crowley, the chief executive of INM Ireland, said: "I am surprised by how consistently strong display advertising is. The strong retail ad spend would suggest, property aside, the rest of the economy is doing very well."

He added that some key sectors, including private sector recruitment, were up on 2007.

A number of analysts put the share increase down to a better appreciation by the market of INM's geographic spread.

Barry Dixon of Davy Stockbrokers said: "I think yesterday's results show the resilience of a diversified business model."

INM has 200 newspapers and magazines, 100 online sites, 75,000 outdoor panels and 130 radio stations across 10 markets on four continents.

Mr O'Reilly gave a strong hint that the geographic spread was set to increase further, saying he hoped to be able to announce a bolt-on acquisition in the Far East "imminently".

Chief financial officer Donal Buggy eased concerns about currency risk when he told analysts yesterday 75pc of the group's South African profits were hedged at a rate of "just above 10 rand" against the euro and that all of the group's exposure to the Australian dollar had been hedged at a rate of 1.63 against the euro.

Operating profit at the group last year increased by 7.8pc to €349.2m on the back of revenue which increased by 3.9pc to €1.67bn. Earnings per share were up by 8pc at 18.8c, while the full-year dividend per share of 13.7c was up 10pc on the previous year. Operating margins increased by 80 basis points (BPs) to 20.9pc and Mr Buggy said he expected this to increase by a further 50 BPs this year.

Sir Anthony O'Reilly, the chief executive of INM, bought 10m shares in the company bringing his stake to 27.94pc. Other directors also bought shares to bring the holding of Sir Anthony and associated parties to 29.4pc.

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