2018 Half Year Results - Independent News & Media PLC
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2018 Half Year Results
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some statements in this announcement are forward-looking. They represent our
expectations for our business and involve risks and uncertainties. We have based these
forward-looking statements on our current expectations and projections about future
events. We believe that our expectations and assumptions with respect to these
forward-looking statements are reasonable. However, because they involve known and
unknown risks, uncertainties and other factors, which are in some cases beyond our
control, our actual results or performance may differ materially from those expressed or
implied by such forward-looking statements. These forward-looking statements speak
only as of the date of this document and no obligation is undertaken, save as required by
law or by the Listing Rules of the Euronext Dublin and/or the UK Listing Authority, to
reflect new information, future events or otherwise.
INM | INTERIM RESULTS 2018 2
CONTENTS
1 Introduction to INM
2 Half Year Results
3 Corporate Strategy
4 Subsequent Events
Murdoch MacLennan, Chairman, Independent News & Media PLC, said: “Despite the challenges
facing INM, the Group generated a profit before tax of €11.5m during the period in line with
expectations, while our full year forecast remains unchanged. The Group’s new strategy is also
making progress and a new Senior Executive Team has been put in place to support our Group CEO,
Michael Doorly, as he leads its implementation. Our balance sheet remains strong and we continue
to explore new avenues to develop profitable revenue streams to support our core business.”
INM | INTERIM RESULTS 2018 3
INTRODUCTION – ABOUT INM
“WE BELIEVE IN ENRICHING LIVES.
INFORMING, ENTERTAINING AND INSPIRING.
IN ALL WAYS, THE TRUSTED SOURCE”.
Market leading media Group on the island of Ireland – strong
newspaper and digital presence.
Largest wholesale newspaper distributor on the island of Ireland
which continues to show a profitable growth.
Cash balance of €89.4m at half year 2018.
Managing gross assets of €208.4m – employing approx. 800
people.
INM | INTERIM RESULTS 2018 4
ICONIC BRANDS
INM | INTERIM RESULTS 2018 5
HALF YEAR RESULTS
The Group generated a profit before tax of €11.5m which is in line with
expectations, while our full year forecast remains unchanged.
Key Highlights:
• Total revenue of €95.0m, down 4.1% [€141.3m pre restatement IFRS15]
• Digital revenues, down 2.9%
• Profit before tax of €11.5m, down 22.8%
• Decrease in operating costs, down €0.9m notwithstanding material H1
investments
• Balance sheet strengthened, net assets of €88.6m including cash of €89.4m
• Exceptional items, costing €2.1m
INM | INTERIM RESULTS 2018 6
SUMMARY OF RESULTS
REVENUE PROFIT BEFORE TAX (before exceptional items)
200 20
148.1 18.5
141.3
€’m
€’m
100 14.9
161.6 11.5
99.0 95.0
0 0
HY16 HY17 HY18 HY16 HY17 HY18
Turnover (pre IFRS 15 restatement)
Turnover (post IFRS 15 restatement)
NET ASSETS PENSIONS
100 100 90.1
66.5
88.6
33.4 DB
€’m
80.1 €’m 52.1
DC
37.3 38.0 33.1
0 0
HY16 HY17 HY18 HY17 HY18
INM | INTERIM RESULTS 2018 7FINANCIAL HIGHLIGHTS – H1 2018
TOTAL REVENUE 1 PROFIT before TAX2 NET ASSETS
€95M €11.5M €88.6M
4.1% 22.8% €8.5m
Advertising Revenue Reported Op Costs 2 Retirement Benefit
Obligations Liability
10.5% by €0.9M
€23.6M
Circulation Revenue Net Exceptional Charge
€2.1M Cash Balance
6.2% (See slide 9)
€89.4M
Distribution Revenue 1
18.4%
1 The adoption of IFRS 15 has changed the presentation of the revenue from distribution of third party news and magazine titles from a gross presentation to a net presentation
2 Pre-Exceptionals
INM | INTERIM RESULTS 2018 8EXCEPTIONALS
The Group recorded a total net exceptional expense of €2.1m, which included:
• A charge of €1.9m for legal costs primarily associated with meeting the requirements
of the Office of the Director of Corporate Enforcement ("ODCE") and the related
Judicial Review;
• A charge of €1.3m related to restructuring costs, primarily redundancy costs;
• A charge of €0.1m for acquisition related expenses;
• A gain of €0.8m arising from the re-measurement to fair value of the Group’s pre-
existing 50% interest in Reachmount DAC; and
• A tax credit of €0.4m on legal, redundancy and other restructuring costs.
€2.1m
Non cash charge of €0.8m,
cash charge of €1.3m
INM | INTERIM RESULTS 2018 9• Revenues are restated under
IFRS 15 - no impact on net profit
HY 2018 INCOME STATEMENT and net assets of the Group.
Total revenues of €95.0m down
4.1% year on year.
Period Ended 30 June 2018 Period Ended 30 June 2017
• Reported operating costs
Euro Millions Before Exceptional Before Exceptional
Exceptional Items
decreased by €0.9m (1.1%),
Exceptional Items
Items Total Items (restated) Total notwithstanding increased
(restated) (restated) investment in consulting, GDPR
and cyber-security costs incurred
Revenue 95.0 - 95.0 99.0 - 99.0
of circa €1.5m.
Operating
(Costs)/income (83.6) (3.3) (86.9) (84.5) 2.6 (81.9) • Profit before tax of €11.5m
Operating profit/(loss) 11.4 (3.3) 8.1 14.5 2.6 (17.1) decreased by (22.8)%.
Share of results of
associates & joint
• Net tax charge of €0.8m relates
ventures 0.2 - 0.2 0.3 - 0.3 to a deferred tax charge arising
from planned pension payments
Finance income - 0.8 0.8 0.1 - 0.1 during the period and an
exceptional tax credit of €0.4m
Finance expense (0.1) - (0.1) - - -
on legal, redundancy and other
Profit/(loss) before restructuring costs.
taxation 11.5 (2.5) 9.0 14.9 2.6 17.5
• Exceptional charge of €2.1m
Taxation charge (1.2) 0.4 (0.8) (0.9) (0.4) (1.3) mainly relates to legal expenses
Profit/(loss) for the and restructuring costs of €3.3m
period 10.3 (2.1) 8.2 14.0 2.2 16.2 offset in part by an exceptional
finance gain of €0.8m on the
Reachmount acquisition and tax
credit discussed above.
INM | INTERIM RESULTS 2018 10BALANCE SHEET
• Intangible Assets increase driven by
additions of €7.7m mainly relating to two
acquisitions and computer software,
30 Jun 31 Dec offset by amortisation charge of €1.6m.
Euro Millions 2018 2017 Δ
• Taxation movement due to reduction of
€1.2m in net deferred tax asset and
Intangible Assets 39.7 33.6 6.1
€0.3m in corporation tax recoverable.
Tangible Assets 39.5 40.1 (0.6) • Cash balance decrease largely driven by
retirement benefit obligations and costs
Taxation 7.2 8.7 (1.5) associated with the two new acquisitions.
Cash and Cash Equivalents 89.4 91.5 (2.1)
• Movement in retirement benefit
Retirement Benefit Obligations (66.5) (77.5) 11.0 obligations mainly driven by deficit
repair/special contribution payments of
Other Net Liabilities (20.7) (20.3) (0.4) €7.3m and re-measurement gains of
€4.5m.
88.6 76.1 12.5
INM | INTERIM RESULTS 2018 11• EBITDA down €2.9m to €14.7m.
CASHFLOW - Euro Millions 30 Jun 2018 30 Jun 2017
EBITDA 14.7 17.6 • €2.0m movement in
provisions/working capital
Movement in provisions/working capital (2.0) (3.3) result of inventory increase due
to acquisitions offset by trade
Retirement benefit obligations deficit repair/special contribution payments (7.3) (0.8) and other receivables decrease
due to timing (delayed receipt
Exceptional expenditure (1.3) (0.8) of year end customer balance).
Cashflows from other operating activities 1.0 -
• Deficit repair payments of
Cash generated by operating activities 5.1 12.7
€7.3m relate to defined benefit
pension schemes and special
Cashflows from investing activities contributions to defined
contribution schemes.
Acquisition of subsidiary, net of cash required (5.3) -
• Exceptional expenditure relates
Cashflows from other investing activities (1.9) (1.1) to legal costs associated with
the requirements of the ODCE
(Decrease)/increase in cash and cash equivalents in the period (2.1) 11.6
& the related Judicial Review
Foreign exchange losses - (0.7)
along with restructuring costs.
Net (decrease)/increase in cash and cash equivalents in the period (2.1) 10.9 • Acquisition of subsidiary relates
to the acquisitions of Hegadon
Balance at beginning of the period 91.5 84.8 and Reachmount.
Cash and cash equivalents at end of the period 89.4 95.7
INM | INTERIM RESULTS 2018 12CORPORATE STRATEGY
INM remains the undisputed news leader in Ireland producing the highest quality content
that inspires, entertains and informs through its print & digital offerings.
In the first half of this year, the Group produced a Profit before Tax of €11.5m in line with
expectations and our full year forecast remains unchanged.
INM has developed a vision for the business to position it for growth and sustained
profitability.
INM | INTERIM RESULTS 2018 13CORPORATE STRATEGY
INM has developed a new corporate strategy to future proof and support the business in the coming
years given the challenging operational and economic environment in the media/print industry.
THREE PILLARS OF SUCCESS & STRATEGIC INITIATIVES
Consolidate print distribution and
protect the network
Build and diversify Reach Group
while maintaining critical route to
market for publishing titles
INM | INTERIM RESULTS 2018 14CORPORATE STRATEGY - PURPORSE TO STRATEGY TO IMPLEMENTATION
1 2 3
Purpose Strategy Implementation
Transformation Next Step
INM | INTERIM RESULTS 2018 15CORPORATE STRATEGY - IMPLEMENTATION
• The Board has been refreshed
• New structures have been put in place
• Key appointments have been made at senior executive level
• Operational plans are being prepared
• Investing in the future – Cyber Security and GDPR
INM | INTERIM RESULTS 2018 16SUBSEQUENT EVENTS
• Awaiting judgement of the Office of the Director of Corporate
Enforcement (“ODCE”)’s application for the appointment of inspectors to
investigate the affairs of the Group.
• The Company has responded to a series of questions put to it by the Data
Protection Commission (“DPC”) regarding a data security incident in 2014.
• In August 2018, Mr. Kieran Mulvey was appointed as a non-executive
director by the Board.
• There were no other events since the period end that would require
adjustment or disclosure in the Half Year Group financial statements.
INM | INTERIM RESULTS 2018 17SUMMARY
Revenue reported under IFRS 15, no impact on net
01
profit or net assets.
Profit before Tax €11.5m in line with expectations
02
& exceptional costs of €2.1m.
Net assets increase to €88.6m with a cash balance
03
of €89.4m.
New corporate strategy identified focused on
04 protecting the core, expanding & dominating
existing & new niches and enabling the future.
New appointments made to ‘SET’ and to the Board
05 of Directors enabling successful delivery of the
strategic plan.
Continued diversification through two new
06
acquisitions.
INM | INTERIM RESULTS 2018 18Q&A Thank You
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