It’s five years since the O’Reilly family lost control of INM – is the company any better off?

Wednesday, April 19th, will mark the fifth anniversary of Gavin O’Reilly’s exit as chief executive of Independent News & Media.

His departure, after 19 years with the company, brought an end to the O’Reilly family’s connection with the day-to-day running of Ireland’s biggest media group, a link that had dated back 39 years.

His father, Sir Anthony O’Reilly, had stepped down as chief executive in 2009.

This all followed a bitter and very public battle between the O’Reilly family and rival shareholder Denis O’Brien, who spent more than €500 million building a stake of just under 30 per cent in the publicly-listed company.

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In his exit statement, Gavin O’Reilly said: “It had become clear that recent and public shareholder tensions were proving an unnecessary distraction for both me and the company.

“The board and I agreed that what the company needs now is a board, management team and shareholder base that is purposefully unified and aligned for the company’s immediate challenges and for the many opportunities that exist in the future.”

This was wishful thinking on his part as more drama was to follow with Paul Connolly, an O'Brien representative on the board of INM, taking a legal action to block O'Reilly's €1.87 million severance payment.

Less than two months after O'Reilly's departure, the company's chairman, James Osborne, and its chief financial officer, Donal Buggy, were unceremoniously ousted from their posts at the company's annual general meeting, with O'Brien voting to remove the pair.

Leslie Buckley, O'Brien's long-time business associate, succeeded Osborne as chairman and there has been root-and-branch change at INM since then.

Cash pile

So how how does INM in the era of O’Brien and Buckley compare with five years ago? The answer is decidedly mixed.

In 2011, Gavin O’Reilly’s last full year in charge of the business, INM posted revenues of €558 million. Last year, the company had turnover of €323.4 million.

Of course, in the intervening years, INM sold its businesses in South Africa and Australia and divested of some other assets here and there. But even on an island of Ireland basis, INM under O’Reilly had revenues of €363.4 million in 2011, some €40 million higher than last year.

Its operating profit, pre exceptionals, in Ireland was €45.6 million in 2011 compared with €41.8 million last year. Its EBITDA at €102.2 million was more than double the figure recorded by INM in 2016, albeit helped by a dividend payment from APN in Australia.

The company’s operating margin, meanwhile, has remained roughly the same at 12.5 per cent.

In terms of its indebtedness, INM is unquestionably in a better place today. Its net debt of €426.8 million has been turned into a cash pile of almost €85 million.

Last year Buckley wanted to use some of that cash to buy Newstalk, the national radio station owned by O'Brien's Communicorp media company. This led to a dispute with INM's current chief executive, Robert Pitt, who has made a protected disclosure to the Office of the Director of Corporate Enforcement.

Newspaper circulation

Buckley and O’Brien might also point to the fact that INM’s market capitalisation has increased by 31 per cent over the past five years but this looks less impressive when pegged against the 109 per cent rise in the Iseq in Dublin since April 2012.

All of that was against a €138 million debt write-off since 2011 and a significant curtailment of pension benefits for staff, a matter that has led to a bitter dispute wtih many current and former workers.

The circulation of INM's main newspapers in Ireland has also suffered.The circulation of its flagship Sunday Independent title has declined from 250,641 in the second half of 2011 to 191,594 in the July to December period for last year.

The Irish Independent's circulation has declined by 26 per cent to 97,104, while the Sunday World is down 40 per cent to 149,652. It's a similar story in Northern Ireland, where circulation of the Belfast Telegraph declined to 40,042 copies a day in the second half of 2016 when compared with 53,771 five years earlier.

Its digital strategy has flip-flopped with the company deciding against a paywall for its web content. Online revenues rose last year by €2.6 million or more than 20 per cent to €15.1 million but this didn’t compensate for the €6.5 million reduction in print advertising income.

It’s also worth noting that online revenues account for just 5 per cent of the company’s total income. Hardly a dramatic leap forward in five years.

Twitter: @CiaranHancock1