ONE MORE THING:IS GAVIN O'REILLY'S term as chief executive of Independent News & Media (IN&M) nearing an end?
He should certainly be feeling the heat after the publication of an anaemic set of full-year results yesterday. Revenue fell by 10.9 per cent in 2011 while operating profit was 8.6 per cent lower at €75.5 million.
A non-cash impairment charge of €87.2 million tipped the company into the red in 2011.
And while O’Reilly declined to provide a profit forecast for 2012, he indicated that it would probably be lower than last year’s figure against a backdrop where Irish advertising is likely to be down by a single-digit figure and South Africa would be flat.
IN&M’s Irish advertising revenue fell 11.2 per cent last year and South Africa 2.1 per cent. It required another hefty dose of cost-cutting – down 11.3 per cent last year – for the results to retain some sort of sheen.
Speculation is now mounting that Denis O’Brien and, possibly, Dermot Desmond will move to oust O’Reilly from his post at the annual meeting of shareholders in June.
O’Brien is still seething about the removal of his long-time business associate Leslie Buckley from the board of IN&M last year and doesn’t rate O’Reilly. He owns 22 per cent of the company while Desmond, who has also been publicly critical of company strategy, has 5.75 per cent, a stake that he could easily add to before June.
This is a powerful bloc of votes in the context of a simple majority of votes cast being required to remove a director. About 68 per cent of votes were cast last year.
O’Reilly was stoic when quizzed about the issue yesterday.
“I think I have a very strong mandate. I have a very supportive board. I have a strategy that has been firmly endorsed by the board,” he said.
“I can’t put myself in the mind of Denis O’Brien or Dermot Desmond. These questions need to be directed to them. All we can do is manage the business to the best of our ability.”
O’Brien only needs to win this vote once to gain effective control of the board.
For now, he and Desmond are keeping schtum on their intentions, but they might have the final word in June.
