Independent News & Media (IN&M) has reported a 4.5 per cent rise in interim operating profits before exceptionals to €154.6 million. Pretax profits, however, fell 13.4 per cent to €94.1 million after accounting for one-off charges of €27.6 million.
The publisher of the Irish Independent and Sunday Independent increased its interim dividend by 10.1 per cent to 4.57 cent per share.
IN&M chief Sir Anthony O'Reilly, its dominant shareholder, will receive interim dividends of €9.11 million. Dissident investor Denis O'Brien, now IN&M's second-largest shareholder, will receive €3.12 million.
Basic earnings per share declined 28 per cent to 4.96 cent in the six months to June and diluted earnings per share before exceptionals rose 8.1 per cent to 8.03 cent. IN&M stock closed virtually unchanged at €3.135.
The group has spent €117 million on the buyback of 32.4 million shares and is expected to buy back another 23.6 million shares to minimise the dilutive impact in November of the maturity of New Zealand cumulative preference shares.
Goodbody analyst Philip O'Sullivan said the results were satisfactory but said in a note that the exceptional charge was "well ahead" of his €8 million forecast.
IN&M took a restructuring charge of €29 million to fund redundancies from its permanent staff as it outsources newspaper production and other functions. About 450 staff left the group in the first half and a further 129 departures are anticipated in the second half.
IN&M chief operating officer Gavin O'Reilly said the full-year cost of its "headcount reduction" programme would be in the region of €45 million. Tax credits associated with such charges reduced the first-half tax bill by €3.4 million to €17.9 million.
First-half revenues rose 2.4 per cent to €815.5 million. Mr O'Reilly is forecasting low to mid single-digit revenue growth for the full year, "based on what we're seeing now".
He attributed a 1.4 per cent drop to €198.3 million in revenues in the Irish unit to the loss of certain low-margin distribution contracts and the cessation of contract printing at the Kerryman paper.
Operating profits in Ireland rose 4.7 per cent to €48.9 million, with staff reductions contributing to a rise in operating profit margins to 24.7 per cent from 23.2 per cent.
IN&M said Irish advertising revenues were up 10 per cent in the first half against an industry average of 4 per cent. Vincent Crowley, head of the Irish unit, said property advertising was down but said the level of such advertising remained "resilient" in spite of the housing slowdown.
Operating profits rose 2.3 per cent to €85.1 million in Australian group APN, 38.3 per cent-owned by IN&M. There no plans to revive IN&M's unsuccessful bid this year to take APN private, Mr O'Reilly said.
Operating profits in Britain and Northern Ireland rose 19.7 per cent to €7.3 million.
