15th Oct 2013 08:58
LONDON (Alliance News) - Irish newspaper group Independent News & Media PLC Tuesday reported a further decline in print advertising sales in the last three months, albeit at a slower rate than in the first half of the year, while online revenue growth continued to accelerate.
The group, publisher of the Irish Independent and The Herald, said total revenues fell 5.6% between July 1 and October 11 as print advertising revenues fell 8.1% and circulation revenues declined 5.1%. However, online revenues were up 18.2%.
In the first half of the year, the company had reported an 8.2% decline in total revenues, as print advertising dropped 14.6% and circulation revenues dropped 4.4%, while online revenues were up 8.2%.
"There has been a noticeable improvement in advertising revenue performance in the period since the beginning of June," the publisher said in a trading update.
The company, like many peers, is struggling with declining print circulation and advertising revenue that's not yet being offset by increased online revenue. In August it had reported a narrowed pretax loss for the first half of the year as it more than offset the revenue declines with cost cutting.
That process has continued, it said, as it reduced operating costs 5.9% in the last three months, meaning its operating profit is 3.8% higher in the year to date compared with the same period a year earlier.
Independent News & Media is tying its prospects to the Irish economy, which may just be coming off life support. Ireland is Tuesday set to make cuts and tax hikes worth EUR2.5 billion euros in 2014 as part of what the government says will be the last of the "really tough" austerity budgets. It is also expected to exit a eurozone bailout programme by the end of the year.
"Although the Irish economy still has challenges ahead, consumer sentiment has improved, property prices are showing signs of stabilisation and consensus forecasts indicate Irish economic growth in 2014 and beyond," Independent News & Media said in its statement. "The improving outlook for the Irish economy should also benefit from the upcoming budget which is now expected to be less severe than originally forecast."
The company, which used to own the Indpendent and Independent on Sunday in the UK before selling the titles to Russian billionaire Alexander Lebedev in 2010, has been further restructuring its business and its debt this year.
It sold its South African assets in August for SAR2 billion, using the proceeds to cut debt, and then restructured its defined benefit pension scheme meaning members had fewer accrued benefits, reducing the deficit on the scheme by about EUR110 million. The final stage of the restructuring will be an equity issue, which it hopes will reduce debt to about EUR118 million and leave it with cash to develop its business.
Independent News & Media shares were up 2.8% at EUR0.0720 in London Tuesday morning. The stock has more than doubled so far in 2013 as it improved its balance sheet and restructured.
By Steve McGrath; [email protected]; @stevemcgrath1
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