INM warns advertising remains 'erratic'

INDEPENDENT NEWS Media said yesterday that it continues to “target” an improvement in its operating profit this year and a reduction in its debt.

But the media group warned that advertising in Ireland remains “very short term and erratic” and has yet to stabilise.

Meanwhile, Denis O’Brien yesterday disclosed that he has acquired more shares in INM.

Mr O’Brien bought 117,274 INM shares, pushing his stake to just above 22 per cent.

In a telephone interview with Bloomberg yesterday, INM’s chief executive Gavin O’Reilly said the decision of Mr O’Brien’s three nominees to the board to question the independence of non-executive director Bengt Braun was needless.

“It is a fairly unusual position to take,” Mr O’Reilly said. “It is not an issue that needed to be an issue.”

Mr O’Brien’s nominees – Leslie Buckley, Paul Connelly and Lucy Gaffney – have indicated that they will vote against the adoption of the financial statements at INM’s agm on June 3rd.

But they will not block Mr Braun’s re-election as a director. Mr Braun and Mr O’Reilly serve together on the board of WAN-Ifra, a trade body.

Mr O’Reilly told Bloomberg that this did not mark a cooling in relations with Mr O’Brien.

“Do I think we have suddenly reached the point of a commencement of hostilities? No, I don’t.”

In an interim management statement yesterday, INM said its total group revenue fell by 5.1 per cent in the first 18 weeks of this year.

Total advertising revenue was down by 7.9 per cent while circulation earnings fell by 1.5 per cent on the same period in 2010.

INM said the high number of public holidays in April had adversely impacted the business.

But the media group said “normal trading patterns now appear to be returning”.

Davy described the numbers as “disappointing”.

INM said it continues to deleverage. It generated free cash flow of €27.3 million in the first four months of the year.

This reduced net debt to €446.3 million compared with €473.6 million at end of 2010.

INM said the weakness in Ireland was off-set by better advertising conditions in South Africa.

“Overall advertising visibility remains relatively short term, making forecasting, in Ireland in particular, difficult,” it added.

INM confirmed the “imminent launch” of grabone.ie, a discount shopping site in Ireland.