Trading Statement

 INM REDUCES PROFIT EXPECTATIONS FOR FY17

Dublin and London 19 July 2017: Independent News & Media PLC (INM ID, INM LN) Trading Statement.

INM announces a material reduction in its expectation for full year Profit Before Tax to below market consensus driven by the challenges the media industry and INM continue to face. These include a decline in circulation and readership, a decline in advertising revenues, ongoing uncertainty arising from Brexit, lower than expected growth in digital revenues and increased costs arising from legacy libel awards and the Independent Review.

These challenges, experienced in H1 17 are expected to continue into H2 17 and to impact on the outturn for FY17 as detailed further below.

· Print publishing profitability

A key issue facing the newspaper sector in Ireland is the sustained decline in circulation and readership, resulting in reduced sales and a decrease in advertising revenues. In addition, continued uncertainty over Brexit is expected to result in a publishing advertising revenue decrease of c12% year on year.

As a result of the continued publishing advertising decline and lower than expected growth in digital revenues, total advertising is forecast to decline by c7% year on year.

Whilst INM has market leading titles, circulation continues to decline at c7% year on year.

Cost saving plans are in place to partially mitigate revenue declines, with the ex-Newspread cost base reduced by c€10m year on year. Newspread, the Group distribution business continues to experience profit growth as it diversifies from low margin newspaper deliveries to higher margin non-news items. INM intends to continue to diversify and grow profits in Newspread.

· Libel & legal costs

The significance of a long tail of legacy libel cases and the unpredictability of the level of recent awards has materially impacted this year's performance and management are reviewing the provisioning of outstanding cases to adequately protect against any risk.

Profitability has been directly impacted by costs associated with the Independent Review and meeting the requirements of the Office of the Director of Corporate Enforcement ("ODCE"), and ongoing costs of the Group's Cyber Security and General Data Protection Regulation ("GDPR") projects.

· Digital revenue and profitability

Whilst digital revenues are forecast to grow, the growth will be at a much lower rate than previously envisaged. Growth will primarily come from programmatic advertising and INM's classified businesses as digital advertising yield continues to be impacted by growth in Mobile traffic and the move away from the direct transactional selling of advertising. In order to protect against the longer term impact of this trend, INM has already brought to market FarmIreland (now Ireland's most trafficked farming vertical). It has also applied to the CCPC to gain approval for setting up Offscript Studio, a JV with ShinAwiL. The rolling out of a programme of commercial events continues with the launch of Your Business Live, Players Expo and others.

· Acquisitions in Digital and New Channels

INM withdrew from the proposed acquisition of Celtic Media Newspapers Limited in June 2017. While certain matters pertaining to the Independent Review and the ODCE are ongoing, strategic M&A activity is curtailed, and the Group is instead concentrating on new initiatives which add to its existing lines of business.

INM's Group Chief Executive Robert Pitt said:

"The ongoing challenging trading conditions across all media and the accelerating move to digital, particularly mobile, will weaken the overall results for 2017. The ongoing uncertainty from Brexit, legal costs and the impact of a very punitive defamation regime mean that it is prudent to adjust full year expectations. The Group remains operationally robust and cash generative. Its brands remain relevant, trusted and attractive to both readers and advertisers. In the face of such challenges, I would like to thank all my colleagues who continue to work very hard to enable INM to maintain and develop its business offer."

Interim results for the six months ended 30 June 2017 will be announced on 23 August 2017.

This announcement contains inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 ("MAR"). Upon the publication of this announcement, this inside information is now considered to be in the public domain.

- Ends -

For further information, contact: