22nd Dec 2005 07:00
Independent News & Media PLC22 December 2005 INDEPENDENT NEWS & MEDIA PLC 2005 FULL YEAR PRE-CLOSE TRADING UPDATE Ticker: (Reuters) INWS.I / INWS.L and (Bloomberg) INWS ID Dublin/ London - December 22nd 2005: Independent News & Media PLC ('Independent'or the 'Group'), the leading international media and communications group, todayissued its regular trading update in respect of the 12 month period ending 31stDecember 2005, ahead of its close period. This update is intended to provide allmarket participants with an overview of the Group's financial and operatingperformance for 2005. Independent's 2005 full year preliminary results arescheduled for release on 22nd March 2006. SUMMARY HIGHLIGHTS (for the 11 months to 30th November 2005) • All five geographic regions (Australia, Ireland, New Zealand, South Africa and the United Kingdom) showing good revenue growth.• Advertising growth in all five regions: Group revenues expected to be ahead by over 7.5% for the 11 months.• Circulation growth in all five regions: Group revenues expected to be ahead by over 3.0% for the 11 months.• Online revenues augmented by the launch of new classified portals.• Operating costs continue to be well managed globally - despite European newsprint cost increases - reflecting the flow through benefits of cost reductions in 2004 and early 2005.• Good savings in interest costs following the completion of a new bank facility, reflecting the Group's significantly strengthened financial position.• New product launches/ initiatives performing to - or ahead - of plan.• 26%-owned Indian associate, JPL (publisher of India's largest newspaper, Dainik Jagran), announces its intention for an IPO on the Indian Stock Exchange in early 2006. REVENUES The Group enjoyed strong revenue growth across its geographically-balancedoperations during 2005, with each of our five main markets (Australia, Ireland,New Zealand, South Africa and the United Kingdom) showing good underlying growthin both advertising and circulation revenues. The Group expects to reportrevenue growth for 2005 of in excess of 7.5% - in line with current marketexpectations. This performance reflects the continued strength of the Group'smarket-leading positions in diverse and growing economies. • AdvertisingThe Group's advertising revenues continue to show broad-based growth across themajor advertising categories of ROP and colour display, retail, and classifieds- including property and recruitment. This performance reflects ongoing productdevelopment initiatives, the continuing economic strength in Ireland and SouthAfrica, and the regional diversity of the Group's operations in Australia andNew Zealand. As such, 2005 will show double-digit advertising growth in Irelandand South Africa. While the general UK market remains behind last year - asrecently confirmed by other UK media companies, the Group continues toout-perform the market, with advertising revenues up year-on-year. The Group'sAustralasian operation continues to show solid advertising gains across its 3major divisions (Radio, Outdoor and Regional Newspapers) - underpinned bybuoyant local economies and strong commodity prices. Online revenues continue to enhance this advertising growth in all markets,particularly across the main classified pillars. The Group continues to identifynew incremental revenue streams and we remain ever active participants in thisarea. The recent successful launches of www.loadza.com - the "all island ofIreland" classified and recruitment portal - and the www.search4.co.nz portal inNew Zealand have both expanded the Group's overall market positions and continueto trade ahead of expectations. • CirculationThe Group's circulation revenues increased across all markets, based on goodunderlying volume and price increases. Most notably, following the success ofits sister paper, The Independent, a compact edition of the UK Independent onSunday was launched in October. The 14-month old Herald on Sunday in New Zealandis now the largest selling Sunday newspaper in Auckland. With our stated aim ofbeing language indifferent, our now profitable Zulu-language newspaper, Isolezwe- which was launched in mid-2002 - continues its significant growth, withcirculation now exceeding 85,000. Overall, the Group expects to report growth incirculation revenues for 2005 in excess of 3%. The Group continues to investjudiciously in marketing and product development across its operations tosupport new product innovation, circulation and readership growth. OPERATING COSTS The Group is committed to being the low cost operator in each of its markets andto sustaining the highest operating margins among its peer group. Despiteongoing investment in new products and proactive marketing, the Group expects toreport continued good growth in operating margins, as the flow through benefitsof prior cost efficiency programmes are fully realised. GROUP DEVELOPMENTS: 2005 • In June, the Group acquired 26% of the leading Indiannewspaper publisher, Jagran Prakashan Ltd ('JPL'). JPL publishes theHindi-language newspaper, Dainik Jagran, India's largest circulating and mostread daily newspaper. Dainik Jagran is now read by over 21.2 million people andis, thus, the largest read newspaper in the world. Reflecting only 6 months ofownership, JPL is expected to make a modest financial contribution to theGroup's performance in 2005. On December 1st 2005, JPL filed a draft red herringprospectus with the Securities and Exchange Board of India (SEBI) for a publicissue of shares in 2006. Further updates will follow in early 2006. • In June, the Group concluded a new 15-year contract print agreementwith News International - commencing in 2007 - to print The Sun and the News ofthe World from the Group's expanded printing facility in Belfast. The Belfastprint facility is now the largest and most efficient newspaper printing/production operation on the island of Ireland, printing most of the major UKnationals, including the Trinity Mirror titles, Express Newspapers titles andthe Daily Telegraph. • In June, the disposal of iTouch plc, at a total valuation of c. €250million, generated €100 million in cash proceeds for the Group, enhancing theGroup's strategic media focus and dramatically improving Independent's capitalstructure and future financial flexibility. • In September, the Group concluded a new and improved bank facilityto extend the maturity profile of its debt and to lower its overall debtservicing costs. • In September, the Group launched Herald AM - a new Dublin-commuterfree newspaper, which has achieved a first-time November ABC certifieddistribution of over 66,000, outperforming the recently-launched Metro. • In October, the Group disposed of the former Sunday World premisesin Dublin for in excess of €18.5 million - as a result of the Group's ongoingprogramme to reduce costs and to enhance operating margins. OUTLOOK Strong growth in revenues across all media platforms and markets, a vigorousprogramme of product development, ongoing efficiency benefits and a consequentimprovement in operating margins, support the Group's expectations of anotherperiod of double-digit earnings growth for 2005 and position the Group well forthe future. The Group's Chief Executive Officer, Sir Anthony O'Reilly, concluded: "2005 was a year of significant progress for Independent. We expanded ourgeographic reach and indicated that we are both language and locationindifferent, provided the economic indices are favourable. We sharpened ourstrategic focus, continued to re-size our operations, and increased ourfinancial flexibility. "As the underlying performance indicates, Independent is unique among globalnewspaper and media companies - showing positive underlying growth in bothadvertising and circulation revenues - and is projecting a clear vision of, andcommitment to, its future as a multi-media and online provider. "The strength and diversity of Independent's franchises in vibrant economies andthe expected benefits of both our market expansion efforts and our costefficiency measures should sustain superior earnings growth for your Group againin 2006." -- Ends -- For further information, please contact: Gavin O'Reilly Chief Operating Officer +353 1 466 3200Donal Buggy Chief Financial Officer +353 1 466 3200 Investors and analysts Media MediaMark Kenny/ Jonathan Neilan Pat Walsh Rory GodsonK Capital Source Murray Consultants Powerscourt MediaTel: +353 1 631 5500 Tel: +353 1 498 0300 Tel: +44 207 236 5619Email: [email protected] About Independent News & Media PLC Independent News & Media PLC is the leading international media andcommunications group, with interests in Australia, Ireland, New Zealand, SouthAfrica, the United Kingdom and most recently, India - operating in the areas ofnewspapers (national and regional), radio and outdoor advertising. The Grouppublishes over 175 individual titles with a weekly audience of over 100 millionconsumers, in addition to its 70+ online sites. The Group manages gross assetsof €4.0 billion, revenue of over €1.8 billion and employs over 11,000 peopleworldwide. Further information is available on our Group website www.inmplc.com. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Independent News & Media