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INM confident of agreeing bonds deal

Business Editor,David Prosser
Friday 28 August 2009 12:35 BST
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Independent News & Media, the owner of The Independent, is confident of agreeing a deal with holders of €200m worth of bonds due for repayment shortly, the company said today.

Unveiling results for the first half of the year, INM also revealed that it has agreed the sale of INM Outdoor, its South African advertising business, in a deal that will raise €98m. Along with other disposals, the group is on target to raise funds of around €150m this year.

INM had been due to repay the bond issue in May, but has deferred the deadline several times in standstill agreements with its creditors. Today, the company said negotiations over the facility were continuing and that “the directors believe that an agreement can be reached that is acceptable to the group”.

INM’s post-tax profit was €29.8m during the first half of the year, down from €96.5m last year as the global recession hit advertising revenues. However, the group also incurred exceptional costs of €86.6m, mostly relating to write downs of the value of some of its newspaper assets. Overall, the company lost €34.7m during the first half.

Gavin O’Reilly, INM’s group chief executive officer, warned that the media sector was unlikely to see much of a pick-up in advertising during the second half of 2009, other than the normal uplift seen during the run-up to Christmas.

However, Mr O’Reilly said an aggressive focus on costs across the INM group should enable the company to hit its previous profit forecast for the year, of between €180m and €210m before exceptionals, albeit at the lower end of the range.

“A continuing and highly effective focus on operating cost reduction together with a series of business process improvements have yielded significant benefits within the period,” said Mr O’Reilly. “As a consequence, any improvement in broader market conditions should translate to good earnings growth and operating margins.”

In the UK, INM slipped to a €3.8m loss during the first half, following a sharp fall in advertising sales. However, the group said its national newspaper division, comprising The Independent and Independent on Sunday, had improved its performance with a series of cost-saving initiatives.

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