Laura Slattery and Steven Carroll

Falling advertising income and a decline in earnings from contract printing were the main factors in an 8.2 per cent drop in revenues at Independent News & Media in the first half of the year.

INM’s revenues fell €14.7 million to €164.1 million, after growth of 8.2 per cent in its digital revenues only slightly compensated for a 14.7 per cent plummet in print advertising revenues during the period. The company also lost a British magazine printing contract, leading to a 19.5 per cent decline in this part of its business. Circulation revenue held up better, falling 4.4 per cent.

The publisher of the Irish Independent, the Sunday Independent, the Sunday World and the Belfast Telegraph said cost-cutting measures had generated €15.9 million in savings and helped it to record an operating profit of some €15.2 million (up 8.6 per cent or €1.2 million), despite the fall in overall revenue.

Net debt stood at €434.6 million at the end of June and this has now been reduced to €290.6 million following the disposal of INM’s South African business.

INM's group chief executive Vincent Crowley said work on a third and final stage of the company's restructuring – a €40 million capital raise to further reduce debt – was under way and was likely be completed by the end of the year.

Before that, “the key next step” in its restructuring is to secure Pensions Board approval for its proposed restructuring of its defined benefit pension schemes in the Republic, which will see staff retirement benefits cut by 39 per cent. “We are just now waiting for Pensions Board feedback and sign-off.”

INM confirmed it intended to introduce a "leaky" paywall on its main website by the end of this year. Mr Crowley cited the New York Times as an example of the kind of "leaky" paywall the company intended to emulate on Independent.ie, but said the payment structure had not yet been finalised. "We haven't quite landed on prices yet. International experience has shown that 1.5-2 per cent of your unique users have a propensity to pay," he added. Independent.ie had 5.1 million unique users in July, up almost 40 per cent on a year earlier, which would point to a digital subscription target range of 76,500-102,000.

The group intended to continue publishing both the Irish Daily Star and the Herald, Mr Crowley said, noting the "chunk of savings" banked by the company since it rebranded the Evening Herald as the Herald and began printing the title overnight.

"We would be very committed to the Star as well. We had that hiccup last year with the photographs," he said, referring to the hostile reaction of INM's joint venture partner on the Irish Daily Star, Richard Desmond, to the newspaper's publication of topless pictures of Kate Middleton. "We're through that and we're all mates again."

Although trading conditions in the Republic and Northern Ireland remained difficult, there was a pick-up in the advertising market between June and August, INM indicated. "Visibility is short," Mr Crowley said. "I think it's too soon to call, frankly, whether what we've seen during the summer is just a swallow or whether it's a real uptake."

INM’s stake in Australasian media group APN remained a core part of the business, Mr Crowley reiterated. “We see that as having significant upsides in two main respects. One, we think it’s significantly undervalued at the moment . . . Secondly, it’s in a part of the world that’s quite attractive.”