Independent News & Media to seek further cuts over next 18 months

Appropriate cost structure sought for move towards digital media – Leslie Buckley

Leslie Buckley, chairman INN, voting at Independent News and Media AGM earlier this year. Photograph: David Sleator

Leslie Buckley, chairman INN, voting at Independent News and Media AGM earlier this year. Photograph: David Sleator

Fri, Aug 29, 2014, 01:03

Independent News & Media will seek to implement more cuts over the next 18 months as it seeks an appropriate cost structure for the transition towards digital media, its chairman, Leslie Buckley, has told The Irish Times.

Speaking following the publication of INM’s half-year results, Mr Buckley said: “We’re going to see even more aggressive cost reductions over the next 12 to 18 months.”

INM reduced its cost base by €26 million last year and is in the process of trimming it by another €20 million, including redundancies and the merger of certain editorial functions. Mr Buckley declined to put a figure on what additional cost cutting would be sought but said it would be across the board and further redundancies were possible.

Mr Buckley said the continued decline in newspaper sales would also inevitably lead to a reduction in printing capacity on the island and hinted it might make commercial sense for publishers to consider some form of partnership rather than running their own separate printing operations.

“There’s more we could all be doing together,” he said. “In 2020, will there be the same number of printing machines [in Ireland] that there are now?” INM has large printing facilities at Citywest in Dublin and in Newry.

On the shock departure on Tuesday of Claire Grady as editor of the Irish Independent, INM’s flagship daily newspaper, after just one year at the helm, Mr Buckley said the company was “disappointed” at her departure but stressed she “left of her own accord”.

“She certainly was not fired, no,” he added.

INM made a loss of €2.1 million in six months to the end of June. This was the result of a €16.1 million charge relating largely to a “non-cash accounting adjustment” connected with the “deemed partial disposal loss arising from the group’s non-participation” in an equity issue this year by its Australian associate APN.

Its 18.6 per cent stake in APN is valued at €103 million, although it is carried on its books at €75 million.

Stripping out this charge, INM would have recorded a profit of €14 million, double the level achieved in the first half of 2013.

Its print advertising revenue declined in the six-month period by 2.7 per cent to €35.9 million but this was largely compensated for by a 30 per cent rise in digital advertising to €3.9 million.

Total ad revenues fell by 0.3 per cent to €39.8 million. Mr Buckley described this as “fractional” and said it effectively marked the first time since 2007 that INM’s advertising income had not declined.

INM’s circulation revenue fell by 2.4 per cent to €53 million, with cover price increases lessening the impact of sales declines across all of its national titles. Revenue from its distribution and contract printing business was down 2.9 per cent to €63.7 million.