DUBLIN (Reuters) - Irish publisher Independent News & Media (INME.I)(INME.L) said it will need urgent and substantial restructuring in response to high levels of debt and tough trading, which have deteriorated further since July.
The company warned in August that its operating profit would fall sharply this year as advertising revenue shrinks, following a difficult first half in which senior executives were pushed out by a change in ownership.
The company said group revenue fell 3 percent year-on-year in the 45 weeks to November 9 in constant currency terms, while advertising revenues dropped 5.4 percent. Total costs in the period were down 0.7 percent year-on-year but further cost cutting will be necessary.
“Notwithstanding recent momentum, a significant and permanent realignment of INM’s cost base is now critical to INM’s future success,” said the publishing group on Friday.
Telecoms billionaire Denis O‘Brien tightened his grip on INM earlier this year by increasing his stake to 29.9 percent, pressuring Chief Executive Gavin O‘Reilly into resigning and leading a shareholder revolt that also ousted the company’s chairman and finance chief.
O‘Reilly’s departure ended his family’s 30-year control of Ireland’s largest media company and years of bitter squabbling between the O‘Reilly family and O‘Brien who also owns radio stations in Ireland and a mobile phone company in the Caribbean.
INM generates about two-thirds of revenue from local newspapers in Ireland, including the dominant daily and Sunday titles north and south of the border, and the rest from a South African business, recently put up for sale, where it is the leading newspaper publisher.
The group has already initiated a restructuring programme at certain titles and job cuts at its head office.
The group said on Friday it had been encouraged by interest in its South African business and it is assessing whether the disposal can be delivered on acceptable terms.
Reporting by Lorraine Turner; Editing by Mike Nesbit