INM plots shift to paid online model this year as profits dip to €24m
Independent News & Media (INM) has announced profits of €24.1m for 2018, ahead of market expectations, with CEO Michael Doorly saying the group is moving to introduce a paid model for some online news potentially from the end of 2019.
However, the results also show a number of one-off costs including €3.5m of legal bills associated with investigations by the Office of the Director of Corporate Enforcement (ODCE) and the Data Protection Commissioner (DPC).
Mr Doorly said he expects the ongoing cost of engaging with those processes to be lower this year - in the €2m to €3m range - with fewer court dates anticipated. INM's directors' and officers' liability insurance will also limit the financial impact, he said.
Speculation in the market that INM itself could be a target for takeover by a larger European media business was prompted by its low share price, Mr Doorly said. There was no indication major shareholders were minded to sell, he added.
Financial results for 2018 published yesterday show INM recorded a profit before tax of €24.1m for the 12 months to the end of December 2018, beating expectations but down 15.4pc from 2017.
INM is the biggest private sector media business on the island of Ireland, with titles including Independent.ie, the Irish Independent, 'Sunday Independent', 'Sunday World' and 'Belfast Telegraph'. The €3.5m in legal costs are linked to the high-profile investigations currently underway into INM by the ODCE and DPC, prompted by whistleblower allegations about corporate governance at board level in INM and alleged data leaks.
"The company is co-operating with the inspectors and the DPC in their respective investigations," the results state.
INM's total revenues last year were €191m, down 2.1pc. The fall was primarily driven by a decline in total print and online advertising revenues of 8.8pc, a 6.3pc decline in circulation revenues and a decline in commercial printing revenues. However, distribution revenue increased by 26.5pc, and INM clocked up better revenues in its classified businesses, led by CarsIreland.ie where revenues grew by 18.2pc and margins improved.
CarsIreland's model can be replicated for other segments of the market, Mr Doorly said. In addition, INM plans to introduce a subscription model for its digital products - including paywalls for some content - which is to be in place in the last quarter of 2019 or early 2020.
INM chairman Murdoch MacLennan said the business had made progress implementing a new strategy dubbed INM@21.
"We have recorded a financial performance for 2018 ahead of market expectations and I can assure you that despite the challenges facing the industry the board and senior executive team of your group are both determined and confident that we are heading in the right direction to build a sustainable business for the future and to create shareholder value," he said.