8th Jun 2012 11:05
AGM STATEMENT
Ticker: (Bloomberg) INM.ID/ INM.LN and (Reuters) INME.I/ INME.L
Dublin/London 8th June 2012: Independent News & Media PLC ('INM' or the 'Group') held its Annual General Meeting ('AGM') in Dublin today. At the AGM, the Group's Chairman, James Osborne and the Group's Chief Executive, Vincent Crowley, made the following remarks on the Group's performance and prospects:
James Osborne commented:
"This is my first AGM following my appointment as Chairman of INM in 2011. As I set out in my letter to you in the Annual Report, while there are many challenges facing the Company and our industry as a whole, the management team and Board are committed to navigating through the difficult economic and operating conditions we find ourselves in. Despite highly challenging operating conditions, the Group's performance in 2011 was satisfactory. All of the Group's titles remain profitable.
The Group's brands have retained, and in some cases, strengthened, their leading positions and there is continued demand for the quality journalism that defines our titles. INM has a strong portfolio of market-leading and profitable titles. The Group also has a well-invested and efficient asset base. INM is committed to continuing cost reduction and we are focused on maximising available cash flow for debt paydown, which will deliver value for our shareholders.
At this AGM, Baroness Margaret Jay will retire following nine years of service on the INM Board. The Board sincerely thanks Margaret for her support and contribution during her Directorship. We would also like to acknowledge the contribution of Mr Brian Mulroney who retired since our last AGM; Bengt Braun and Lothar Lanz who recently retired from the Board; my predecessor, Brian Hillery; and, of course, Gavin O'Reilly. We are grateful to them for their contribution to the Board. On your behalf, I would also like to welcome David Reid Scott who joined the Board as an independent Director in December.
Following these changes to Board membership since our last AGM, we would acknowledge that the INM Board is not in compliance with best-practice guidelines on Board independence and we will address this, through the appointment of additional independent Directors, in the coming months.
I would like to acknowledge the contribution of all of our employees whose hard work and efforts deliver our products to millions of consumers each and every day. We would also like to acknowledge the continuing loyalty and support of those consumers who enjoy our products. Finally, we would like to thank you, our shareholders, for your ongoing support and commitment to INM as we work towards re-building the value of Independent News & Media."
Vincent Crowley commented:
"In 2011, against a difficult market backdrop, INM delivered operating profit of €75.5 million and an EBITDA outcome of just over €100 million. A continuing focus on maximising available cash, from a well-invested base, delivered net debt reduction of circa €47 million or some 10%.
Central to this progress has been our ability to effectively manage and to reduce operating costs (despite significant inflationary cost pressure, especially in South Africa). Underlying operating costs decreased by €21.6m or 4.2%. This delivered an increased operating margin of 13.5% which, when set against tough market conditions, is, we believe, a reasonable performance. While advertising and circulation revenues declined reflecting broader market conditions, we made substantial progress across key areas of our business in 2011. INM profitably maintained its market leading positions in both circulation and advertising and, in some cases, extended our lead. Our franchise is resilient, relevant and profitable in an ever-competitive media landscape. Innovation will continue to define our products and our marketing. We are pleased to report digital revenue growth of 10% for 2011. Digital growth, and an appropriate level of investment, is a key area of focus for your Group.
The outlook remains unchanged from our Interim Management Statement issued on 18 May last, where we said that, forecasting in the current climate is very difficult and, at present, advertising conditions remain challenging and erratic. Visibility remains short and susceptible to influence by macro-economic factors.
INM has a strong portfolio of market-leading and profitable titles. The Group also has a well invested and increasingly efficient asset base, with no significant near-term capital expenditure requirements. INM is committed to continued cost vigilance and we have strong operating leverage in our business to translate any improvement in market conditions directly to our bottom line.
Our focus is on maximising available cash flow for continued debt paydown, which will deliver value for our shareholders. Together with the INM Management team, I am very focused on our core strategic and financial objectives which will, in time, return INM to growth and deliver value for all shareholders.
Those objectives include maximising returns on our existing (and well invested) asset base to generate cashflow for continued debt paydown. Continued operating cost reduction and productivity initiatives will support this objective. To give some idea of my initial approach to this area is our decision to close our Head Office in Citywest and move into Talbot St, where our Irish operations are based. This has and will reduce the head office staff numbers. I have not back filled my former Chief Operating Officer role given the current scale and scope of our business. We have also closed the London office and exited the lease effective 30 June this year. In addition we have also announced a redundancy programme in the Sunday World which has been fully subscribed. Clearly, we recognise that debt paydown, of itself, is not a strategic objective but it will drive shareholder returns as value is transferred from debt to equity.
I am also very focused on the difficult position of our pension schemes in Ireland. They are in significant deficit, despite additional contributions from both staff and the company in recent years. We are examining all options to ensure we bring certainty to those contributing to the various schemes and secure a reasonable pension expectation for all. Subject to the appropriate regulatory and financial framework being in place and taking cognisance of yesterday's pension Board announcement, we hope to have this resolved within the coming year.
We intend to continue to profitably enhance both our competitive position and INM's market-leading franchise. We will continue to develop an increasingly diverse revenue stream through enhanced focus and measured investment in digital. After revenues growing 10% last year, year to date (May), our digital revenues have grown by 17.6%. Our Online and Print activities, where appropriate, in an editorial and sales sense, are being merged and we are actively examining ways to enhance our Online content.
To conclude, I would like to thank all shareholders for their continued support as we navigate through challenging economic conditions. Delivering the objectives set will, in time, create value for all of our stakeholders."
Forward-Looking Statements
Some statements in this announcement are forward-looking. They represent our expectations for our business and involve risks and uncertainties. We have based these forward-looking statements on our current expectations and projections about future events. We believe that our expectations and assumptions with respect to these forward-looking statements are reasonable. However, because they involve known and unknown risks, uncertainties and other factors, which are in some cases beyond our control, our actual results or performance, may differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements speak only as of the date of this document and no obligation is undertaken, save as required by law or by the Listing Rules of the Irish Stock Exchange and/or the UK Listing Authority, to reflect new information, future events or otherwise.
Copyright Business Wire 2012
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