Shares fall at INM after latest profit warning
Shares in Independent News & Media (INM) closed down almost 15pc yesterday, after the media group issued a second profit warning in under four months.
INM cited higher than expected one-off legal costs associated with a year-long boardroom dispute that ended with last month's departure of former CEO Robert Pitt.
In a statement issued to the Irish Stock Exchange, the company said: "Legal costs related to the independent review and meeting the ongoing requirements of the Office of the Director of Corporate Enforcement (ODCE) have been significantly higher than previously estimated."
The company also cited challenging market conditions, including the effects of Brexit. Shares fell throughout the day yesterday, to close down 14.8pc at 9.2 cents each after INM said it expected a "material reduction in expected full-year profit before tax".
Analysts at stockbrokers Davy and Goodbody said they now expect pre-tax profits at INM of €25m this year, compared to €40m in 2016.
The latest warning indicated that costs linked to a dispute that arose last year between Robert Pitt and INM chairman Leslie Buckley over a potential bid for Newstalk are continuing to clock up, even after the exit of Mr Pitt and his replacement as CEO by industry veteran Michael Doorly.
Legal and other costs linked to the matter are understood to have run into millions of euros.
The fall-out relates to a dispute over the potential price INM might have bid for Newstalk, with the then CEO supporting a lower price than Leslie Buckley, who is a long- time business associate of Newstalk owner Denis O'Brien, who is also a substantial INM shareholder.
While no offer was made for Newstalk in the end, Robert Pitt brought the matter to INM's then senior independent director Jerome Kennedy, who called together a board sub-committee to look into the matter.
The sub-committee, and later the INM board, found that no issue of concern had arisen.
However, Mr Pitt subsequently made a protected disclosure to Ireland's company law watchdog, the ODCE.
INM in turn established its own formal independent review, carried out by a senior counsel and a governance expert to look at the case.
The company said preliminary results for the 12 months ending 31 December 2017 will be announced on March 9, 2018.
INM said it is "actively engaged in tackling the challenges it currently faces and will continue to seek to maximise its revenue streams".