Independent News & Media plans to cut €20 million from its operating costs over the course of 2014 and 2015, according to chairman Leslie Buckley.
The media group is trimming the cost of producing its newspapers at the same time as it prepares to step up its “substantial” investment in digital activities, shareholders heard at the company’s annual meeting in Dublin.
Mr Buckley told INM shareholders that investment in its "central" digital offering would "lead to value creation" in the business, with online audience growth in turn leading to higher digital advertising revenues.
The subscription-only iPad app launched earlier this year is “going well”, Mr Buckley suggested, while the question of a web paywall, which INM decided to postpone last year, is “not off the agenda”.
INM slashed its operating costs by almost €23 million in 2013 and the company had previously indicated it would seek cuts of about €9 million for this year, with a focus on reducing newspaper production costs across its national titles.
In January, it announced the closure of the Dublin operation of Real-time Editing & Design (RE&D), the company to which it outsourced certain sub-editing functions, with the loss of 50 jobs.
“Unfortunately there will be some headcount reductions,” Mr Buckley said today in relation to its two-year plan.
In last month’s trading update to investors, the media group said total revenues were running down 2.8 per cent since the start of 2014 when compared to the same period last year. But within this overall performance, digital advertising revenues have increased 17.8 per cent.
Mr Buckley said INM was working to “monetise” its digital operations “as fast as we can”. However, the company still “strongly believes” in newspapers and will continue to “support our print offering”, he added.
Speaking after the agm, Mr Buckley said INM was making “very good progress” in its hunt for a chief executive. “We are at a fairly advanced stage,” he said. “It is a critical appointment for INM. This is the person who is going to drive this business into 2020.”
The publishing business “is going to be a very different business by 2020 and in my view a lot of consolidation will have taken place”, Mr Buckley added.
Since the departure of former chief executive Vincent Crowley last month, INM has been run by a sub-committee of the board of directors comprising Leslie Buckley, Triona Mullane, Allan Marshall and Terry Buckley.
One shareholder told the meeting he believed the company was “going in the right direction”, but noted that shareholders were “all languishing for many years without a dividend” and could not sell their shares “because they’re not worth anything”. The shareholder called on the directors to “show some leadership on this” and cut their own salaries.
The INM chairman, who was paid €158,000 for his services last year, responded that the board’s costs had fallen over the years and that the directors were currently engaged in eight sub-committees. “I have worked with a number of boards in my life and I have never come across such a hard-working board,” he said.
Mr Buckley, who is a long-term business associate of INM’s largest shareholder, Denis O’Brien, conceded there is “a long way to go” when it comes to improving the company’s share price.
INM’s dividend policy will be reviewed on an annual basis, but Mr Buckley said he did not expect a payment to be made to shareholders in the foreseeable future.
“I would like to have it paid before we hand out more umbrellas and golf balls,” he said, in reference to another shareholder who thanked the board during the meeting for his receipt of a “lovely” INM-branded umbrella.