29th Jun 2007 16:12
Independent News & Media PLC29 June 2007 2007 FIRST HALF PRE-CLOSE TRADING UPDATE Ticker: (Reuters) INWS.I / INWS.L and (Bloomberg) INWS ID / INWS LN Dublin/ London -29th June 2007: Independent News & Media PLC ('INM' or the 'Group'), the leading international media and communications group, today issuedits regular trading update in respect of the 6 month period ending 30th June2007, ahead of its close period. This update is intended to provide all market participants with an overview ofthe Group's financial and operating performance for the first half of 2007.INM's 2007 first half interim results are scheduled for release on 18thSeptember 2007. SUMMARY HIGHLIGHTS | H1 2007 * o Group revenue expected to be ahead year-on-year by approx. 3%. • Group circulation revenues forecast to be up by approx. 2%. • Group advertising revenues forecast to be up by approx. 5%. o Operating costs continue to be well managed globally - despite newsprint cost increases - reflecting the flow through benefits of new editorial system work flows and prior year cost reductions. o Recent acquisitions and investments (Verivox, Truphone, WNS, Propertynews.com, and Cashcade) performing to, or ahead of, plan. o Indian associate, Jagran Prakashan Limited ('JPL'), continues to thrive and today announced record after tax profits up 140.45% for the 12 months to 31st March 2007. * in constant currency terms REVENUES | H1 2007 The Group continues to enjoy revenue growth across its geographically-balancedoperations (Australia, Ireland, New Zealand, South Africa and the UnitedKingdom) during the first half of 2007. The Group has seen good underlyinggrowth in advertising and circulation revenues and expects to report totalrevenue growth for the 6 months to 30th June 2007 of approximately 3% inconstant currency terms. This solid performance reflects the continued strengthof the Group's market-leading positions in diverse and growing economies,against strong comparisons in the first half of 2006. o Advertising - PublishingThe Group's advertising revenues continue to show growth across the majoradvertising categories of ROP, colour display, retail, property and recruitment.Newspaper advertising revenues for H1 2007 are expected to show underlyinggrowth of approximately 6% in constant currency terms, despite strongcomparators for the same period of 2006. This reflects good performances acrossall regions. o Advertising - OnlineOnline revenues continue to show very strong ( > 30%) growth in H1 2007,particularly across the main classified pillars (loadzajobs.co.uk/.ie,propertynews.com, search4.co.nz) and online display, which has benefited fromthe progressive re-design and additional advertising inventory on the Group'sleading portal sites. The Group continues to actively expand its varied onlineofferings across classifieds, education and services (e.g. price comparators andmobile communications/ solutions). o CirculationThe Group's circulation revenues for H1 2007 are expected to be up byapproximately 2% in constant currency terms, based on a combination of goodvolumes and select price increases for many of the Group's market-leadingtitles. In addition, the Group's most recently launched titles - Isolezwe andDaily Voice in South Africa and the Herald on Sunday in New Zealand - continuetheir successful expansion. The Group's free commuter daily title, herald am,continues to outperform its competitor in the Dublin market. o Radio and OutdoorBoth the Radio (Australia and New Zealand) and Outdoor Advertising (Africa,Australia, Hong Kong, India, Indonesia, Malaysia, and New Zealand) divisionscontinued to trade well, with advertising revenues expected to be ahead of lastyear in constant currency terms. Outdoor profitability is expected to be upstrongly against the prior comparative period. This reflects the cessation of anumber of uneconomic contracts, the successful retention of key contracts andgood gains in new business contracts. OPERATING COSTS | H1 2007 In H1 2007, the Group continued to make significant progress towards its statedgoal of being the industry low cost operator, despite newsprint price increasesof c. 5%. The Group's installation of a common Atex editorial system across alloperating centres is delivering significant efficiencies in page planning, makeup and real-time editorial sharing across the Group's network of titles, withparticular reference to utilization of material worldwide from The Independentin London. Moreover, the benefits of strong cost control and effective ongoingheadcount restructurings will further enhance the Group's operating margin in2007. GROUP DEVELOPMENTS | H1 2007 o Earlier today, INM's 20.8%-owned Indian associate, JPL (publisher of India's largest read newspaper, Dainik Jagran) announced its full-year results (for the year-ended 31st March 2007), with profit after tax up 140.45% on the back of very strong increases in both advertising and circulations. o On 25th May, APN News & Media Limited ("APN"), in which INM holds a 38.5% shareholding, confirmed that the previously announced Scheme to acquire the entire issued share capital of APN would not proceed. INM continues to review opportunities in Australasian media, with the objective of maximising value for INM shareholders. o During H1 2007, Radio Mantra, a new Hindi-language radio network (currently comprising seven FM stations) was launched in the very fast-growing radio sector in Northern India, in conjunction with the Gupta family (the major shareholders in JPL). INM owns 20% of this radio investment (the maximum currently allowable for foreign investors). o During H1 2007, the Group has made significant progress in identifying new revenue streams across each of its operations in the areas of online and education, and further announcements are expected in H2 2007. CAPITAL MANAGEMENT In light of the Group's strong Balance Sheet position, strong financial ratios,and as part of the Group's efficient capital management policy, the Grouppurchased 13,582,299 of its own shares during the first half - representing anet 1.78% of the entire issued share capital. This on-going strategy will enablethe Group to proactively manage the dilutive impact on all INM shareholders,which will arise on the maturity of the New Zealand Cumulative ExchangeablePreference Shares, if as expected, they convert into INM shares (c. 56 million)in late November 2007. OUTLOOK The Group's Chief Executive Officer, Sir Anthony O'Reilly, stated: "INM's global spread of assets across publishing and online, radio and outdooradvertising continue to enjoy solid revenue growth in some of the world'sfastest growing economies. As I stated at the AGM on June 13th, your Group's proven strategy of harnessingnew technology to positively re-engineer workflows and sponsor new innovationsand products - coupled with sensible pricing strategies - gives us confidence inour ability to deliver another year of superior earnings growth." -- Ends -- Note Regarding Forward-Looking StatementsSome statements in this announcement are forward-looking. They represent ourexpectations for our business, and involve risks and uncertainties. We havebased these forward-looking statements on our current expectations andprojections about future events. We believe that our expectations andassumptions with respect to these forward-looking statements are reasonable.However, because they involve known and unknown risks, uncertainties and otherfactors, which are in some cases beyond our control, our actual results orperformance, may differ materially from those expressed or implied by suchforward-looking statements. These forward-looking statements speak only as ofthe date of this document and no obligation is undertaken, save as required bylaw or by the Listing Rules of the Irish Stock Exchange and/or the UK ListingAuthority to reflect new information, future events or otherwise. For further information, please contact: Independent News & Media PLCGavin O'Reilly Chief Operating Officer +353 1 466 3200Donal Buggy Chief Financial Officer +353 1 466 3200 MediaPat Walsh Murray Consultants (Dublin) +353 1 498 0300Rory Godson Powerscourt (London) +44 20 7250 1446Paul Keary Financial Dynamics (New York) +1 212 850 5600 Investors and AnalystsMark Kenny/Jonathan Neilan K Capital Source (Dublin) +353 1 631 5500Email: [email protected] Independent News & Media PLC ('INM') is a leading international newspaper andcommunications group, with its main interests in Australia, India, Ireland, NewZealand, South Africa and the United Kingdom. Spanning four continents, 10 majormarkets and 21 individual countries, INM has market-leading newspaper positionsin Australia (regional), India, Ireland, New Zealand and South Africa. In theUnited Kingdom, it publishes the flagship national title, The Independent, aswell as being the largest newspaper group in Northern Ireland. Across these regions, the Group publishes over 180 newspaper and magazinetitles, delivering a combined weekly circulation of over 31 million copies witha weekly audience of over 100 million consumers and includes the world's largestread newspaper, Dainik Jagran, in India. The Group has established a strong andgrowing online presence, with over 100 editorial and classified sites. INM is the largest radio operator - over 130 stations and an audience exceedingfive million people - and outdoor advertising operator in Australasia and alsohas leading outdoor advertising positions in Hong Kong, Malaysia, India,Indonesia and across Africa. The Group has grown consistently over the last 15 years by building ageographically unique and diverse portfolio of market leading brands, and todaymanages gross assets of €3.9 billion, revenue of €1.8 billion and employsapproximately 9,800 people worldwide. Further information is available on the Group's website www.inmplc.com. 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