SHARES IN Independent News & Media (INM) recovered some recent losses to close 8.4 per cent higher last night after the company said it expected "low to mid single-digit growth" in adjusted earnings per share for 2008. Arthur Beesley, Senior Business Correspondent, reports.
Earnings grew by 8 per cent in 2007, the group said yesterday but warned that they would be hit this year by the decline in property advertising in the Republic of Ireland and in recruitment advertising in the North. However, the group said it was hedged this year against the decline in the value of the South African rand.
The stock closed 11 cent higher at €1.84, but yesterday's results announcement was overshadowed by a strident attack on "dissident" investor Denis O'Brien - who declared a stake of 22.16 per cent in the company earlier this week - by chief operating officer Gavin O'Reilly.
The shares were also helped by INM chief Sir Anthony O'Reilly spending €18.65 million to bring his stake in the company to 27.94 per cent. Share-buying by 10 other directors brought the combined stake of all board members to 29.34 per cent, 0.56 per cent short of the 29.9 per cent limit before a mandatory bid would be required.
Sir Anthony will receive a final dividend of €20.19 million in respect of his shares after a 10 per cent increase in the final dividend to 9.13 cent per share brought the total dividend for 2007 to 13.70 cent per share. Mr O'Brien will receive a final dividend of €15.98 million.
"The business has traded well through the first three months of 2008, with group earnings ahead of last year and all regions growing total revenues in constant currency," Sir Anthony said in a statement. "Despite the uncertain economic environment, we remain confident that, on the basis of current trading in all our geographies, INM can deliver a further year of earnings growth."
Vincent Crowley, chief of INM's Irish unit, said there was no sign of a pick-up in property advertising this year. "In terms of our outlook, we wouldn't be predicting any upturn this year. But we are seeing very strong run-of-press and display advertising which is surprisingly robust and I think that is evidence the rest of the economy is actually quite strong" he said.
Pretax profits declined in 2007 to €248.4 million from €250.1 million after exceptional charges, mainly related to expenditure on restructuring, rose to €37.7 million from €15.6 million. Basic earnings per share declined to 14.6 cent from 15.7 cent while adjusted earnings per share rose to 18.8 cent from 17.4 cent. Revenues rose to €1.67 billion from €1.63 billion and operating profit before exceptional items rose 6 per cent to €349.2 million from €329.5 million.
