Cantillon: INM turns the corner on to a long hard road

Independent News & Media chairman Leslie Buckley was happy to agree with a shareholder at yesterday's EGM who suggested that the company might be "turning a corner" now that it has won approval for its €43 million capital-raising exercise.

“Oh yeah,” he said. The capital raise is, after all, the last of the measures that will reduce INM’s core debt to €118 million.

But he was careful to manage expectations. When asked about the prospect of dividends, Buckley gave a timeframe of five to six years and also agreed that it was still “a long hard road ahead” for the group. “I wouldn’t want to make any Christmas promises.”

It may not be a completely relaxed festive season for some of the group's employees, if comments by chief executive Vincent Crowley, speaking after the EGM, are anything to go by. In August, when the group was nearing the completion of a €26 million cost-savings exercise called Project Resolute – in which the biggest savings were a €14.4 million shave off its payroll – Crowley said there were no particular new cuts in mind, though he cautioned that "efficiencies are an ongoing thing".

Yesterday, he confirmed that the company was “looking again at costs”, indicated that some targets had been identified and said the “reasonably substantial” cuts would be sought from a blend of redundancies and increased productivity. While the market is improving, advertising revenues are still in negative territory year-on-year, he noted.

One important question now is whether the fragility of the sector is, or will become, an influence on the Government's attitude to concentration of ownership in the media. Asked whether there was a danger that any future legislation could cause difficulties for INM given that its largest shareholder, Denis O'Brien, owns quite a few radio stations, Buckley seemed relaxed.

"Obviously it is up to the Competition Authority and the regulator to keep monitoring the situation," Buckley said. But INM was "very satisfied" that "there won't be a problem in the future", he added. "It is really important, I think that, in the media business, there is as much flexibility as possible, because jobs are at stake here."

Indeed. Regardless of what happens to the ownership of the company, it seems INM’s headcount is to fall in 2014.