INM shares rise as online revenue surges
SHARES in Independent News & Media (INM) jumped as much as 11pc yesterday after first-half profits were boosted by a better advertising performance coupled with tight cost controls.
Shares ended the session up 9pc at 7.3c each yesterday.
The publisher of the Irish Independent, 'Sunday Independent' and 'Herald' said revenue from its online operations surged 18.2pc between July and October 11. That followed an 8.2pc rise in the first half of the year. It means online revenue has risen 11.9pc so far this year.
"A slowing rate of decline in print advertising coupled with accelerating online advertising revenue growth is a welcome relief for IN&M," said Davy Stockbroker analyst Simon McGrotty.
"Today's announcement is the first real sign for a number of years of an improving revenue trend and should set the scene for the company's planned capital raising by year-end."
The number of visitors to the Independent.ie website jumped 78pc to 5.9 million in the 12 months to August, while the number of page impressions soared 59pc to more than 64 million.
INM chief executive Vincent Crowley said there had been a "noticeable improvement" in its overall advertising revenue performance since June.
The rate of decline in newspaper advertising at its titles slowed to 8.1pc year-on-year between July and October 11. That compared to a 14.6pc fall in the first half of the year. Circulation revenues were "broadly unchanged", slipping 5.1pc since July compared with a fall of 4.4pc during the first half of 2013. The publisher conceded that the economy continued to face challenges, but added there were positive signs the country was emerging from its worst slump ever.
"Consumer sentiment has improved, property prices are showing signs of stabilisation and consensus forecasts indicate Irish economic growth in 2014 and beyond," it noted.
"Although the Irish economic outlook is not without challenges, the reduced rate of newspaper advertising revenue decline seen towards the end of the first half has generally continued into the second half," the company's statement added. It said that digital revenues continue to show "positive momentum".
The company has delivered year-on-year cost reductions of 5.9pc since July, while costs have fallen 8.4pc in the year to date.
INM said that even though it had an increasingly efficient cost base, it intended to pursue further cost-saving opportunities through on-going process review and improvement.
"Our strong operating leverage leaves us well-positioned to convert any improvement in advertising revenues into improved bottom line performance," it added.
INM plans to raise €40m by the end of the year as part of a previously announced plan to slash debt. That plan has already seen INM sell titles in South Africa, reach agreement with banks and reduce the cost of pensions.