Irish publishing group Independent News & Media has posted its first revenue growth in more than two years as recovering advertising pushed first-half sales up eight percent.
Pretax profit excluding one-off items rose 39 percent.
The Dublin-based group has had to sharpen its focus on titles in Ireland, as well as in South Africa, New Zealand and Australia, after selling its UK newspapers and interests in Indian media this year to help secure its future.
Chief Executive Gavin O’Reilly said Ireland – which emerged from the eurozone’s longest recession in the first quarter but is still in the midst of a crippling banking crisis – now had “two economies”, with the retail half getting on better.
“What people have to realise is that there is more to the Irish economy than builders and bankers,” O’Reilly told reporters.
“In terms of retail and brand activity, we are seeing a much improving trend there. It’s not all doom and gloom and there is some consumer activity.”
The group said it increased market share in Ireland – where it publishes the Irish Independent and Sunday Independent – and O’Reilly added that advertising trends were nearing a bottom and would return to growth in 2011.
“(This) marks a turning point for the group and provides evidence that earnings have stabilised in what has been a very difficult market,” Simon McGrotty, analyst at Davy Stockbrokers, wrote in a note, referring the to Irish division.
Reiterates guidance
INM, which swapped debt for a large equity stake and disposed of other assets last year to pay back an overdue bond, said revenue to June 30 rose to 656.5 million euros ($834.5m), ahead of the 650.5 million expected by three analysts polled by Reuters.
Improving readership and advertising in titles like The New Zealand Herald – the country’s largest newspaper – saw the group’s Australasian division generate more than half of revenues for the first time.
That improvement was flagged to investors last week when the chief executive of APN News & Media, in which INM holds a 32.2 percent stake, said the advertising recovery in the region was “well and truly under way.”
INM, which said June and July’s soccer World Cup failed to deliver any material lift to revenues in South Africa, added that overall revenue performance, profits and advertising trends continued to improve since the end of June.
It reiterated its expectation for operating profit to improve for the full year in line with expectations after an uplift of almost 30 percent in the first half.
Three analysts surveyed by Thomson Reuters I/B/E/S expect operating profit to rise by the same amount to 230 million euros for the full year.
