Independent News & Media (INM) issues profit warning
Independent News & Media has issued a profit warning, blaming in part the costs of an independent review of corporate governance undertaken following a high profile board level disagreement late last year, and the high cost of libel cases.
Ireland's leading media group, which publishes the Belfast Telegraph and the Sunday Life, cited a number of factors for the warning, including ongoing uncertainty arising from Brexit, lower than expected growth in digital revenues and increased costs arising from legacy libel awards as well declines in circulation and advertising.
"INM announces a material reduction in its expectation for full year Profit Before Tax to below market consensus driven by the challenges the media industry and INM continue to face. These include a decline in circulation and readership, a decline in advertising revenues, ongoing uncertainty arising from Brexit, lower than expected growth in digital revenues and increased costs arising from legacy libel awards and the Independent Review," the company said in a trading statement.
The company said the challenges experienced in the first half of 2017 are expected to continue through the rest of the year.
Libel awards paid out by the business are identified as a particular issue, in the trading statement.
"The significance of a long tail of legacy libel cases and the unpredictability of the level of recent awards has materially impacted this year's performance and management are reviewing the provisioning of outstanding cases to adequately protect against any risk," it said.
INM said continued publishing advertising decline and lower than expected growth in digital revenues means total advertising is forecast to decline by around 7pc year on year. Circulation continues to decline at 7% year on year.
The group said cost saving plans are in place to partially mitigate revenue declines.