TIDMINM
RNS Number : 5564B
Independent News & Media PLC
29 October 2009
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INM ISSUES INTERIM MANAGEMENT STATEMENT
Ticker: (Bloomberg) INM.ID/ INM.LN and (Reuters) INME.I/ INME.L
Dublin/London - 29th October 2009: Independent News & Media PLC ['INM' or
'Group'] today issued its Interim Management Statement ['IMS'] in accordance
with the Transparency Regulations 2007. This IMS is an update on INM's trading
performance for the year to date, and in particular for the period since 1st
July 2009 and includes an outlook for the year.
Year to Date Performance
The Interim Results Announcement on 28th August 2009 noted that the Group
reported a resilient performance in a global market that was experiencing
adverse economic pressures and unprecedented advertising weakness. Group
revenues for the 1st half of 2009 were down 14.9%, in constant currency, with
Group advertising revenues down 19.6% and Group circulation revenues down 0.1%
(both in constant currencies).
To date in 2009 (i.e. 43 weeks to 23rd October 2009), INM's total revenues in
constant currency are estimated to be approx. 14% behind last year, with:
* Group advertising revenue down by approx. 19%; and
* Group circulation revenue down by approx. 2%.
This marginally improved year-to-date revenue performance compared to the trend
for the 1st half of 2009 demonstrates a stabilising advertising revenue trend,
with each region experiencing similar advertising trends to H1 2009.
Group operating profit before exceptional items (in constant currency) for the
year to date is estimated to be approx. 37% behind last year, compared to 44.8%
down in the 1st half of 2009. This improved operating profit performance on the
1st half resulted from the stabilisation in advertising revenue and continued
strong cost management across all regions. Year to date operating costs (in
constant currency) are estimated to be down approx. 9% on the same period last
year, compared to 7.5% down in the 1st half of 2009.
Key Events to Date since 1st July 2009
The following key events occurred within the Group during the period from 1st
July 2009 to date:
* In July 2009, successfully disposed of stake in Cashcade, UK's leading online
bingo operator, for EUR15.2 million;
* In July 2009, sold 7.3% of Indian newspaper publisher Jagran Prakashan Limited
['JPL'] for EUR21.7 million. INM still retains a 13.5% shareholding in JPL,
currently worth approx. EUR66 million;
* In August 2009, agreed to dispose of 100% of INM Outdoor ['INMO'], INM's South
African outdoor media company, to a pan-African private equity investor group
led by Helios Investment Partners. This disposal will realise gross cash
proceeds of ZAR 1,100 million (approx. EUR98 million) for the Company and is
expected to complete before the end of 2009. The disposal is subject, inter
alia, to approval by INM's shareholders as a Class 1 transaction (EGM will be
convened shortly) and approval by the South African Competition Authority;
* The 4th part of INM's previously announced EUR150 million asset disposal programme
is the sale of the Group's stake in Verivox, the German online utility price
comparator business. This disposal is ongoing and is expected to complete
shortly;
* The service sharing agreement with DMGT under which INM's UK National titles
moved premises to DMGT's offices in London was implemented in H1 2009, with cost
savings achieved in the first half and further cost savings being delivered in
H2 2009.
* INM announced that its Irish daily freesheet newspaper, herald am, would merge
with Metro to form Ireland's leading daily freesheet and INM will own one third
of the merged entity. This merger remains subject to Competition Authority
approval; and
* As previously announced, due to the difficult credit markets and ongoing
economic turbulence, the Group was unable to meet its repayment obligations in
relation to the maturity of its Bonds on 18th May 2009. In addition, as at 30th
June 2009, the Group was unable to comply with certain covenant tests contained
within its core bank debt facilities. On 16th May 2009, in advance of the
maturity of the Bonds, and in advance of the covenant testing date in respect of
the Group's core debt facilities, the Company agreed a financial standstill with
the Bondholders and its Banks, whereby all parties agreed to forbear from taking
any action to enforce any claim for any payment during the financial standstill
period and this has subsequently been extended. The current standstill period
extends until 30th October 2009 and a further extension is currently being
negotiated.
During the period of the financial standstill, the Company has been engaged in
discussions with its Banks and the Ad Hoc Committee of Bondholders with the
objective of agreeing a consensual restructuring solution, capable of
implementation outside of a court administered process, and which would
recognise the economic interests of, and preserve value for, all stakeholders in
the business. On 7th October 2009, the Group announced that it had entered into
an agreement with an Ad Hoc Committee of Bondholders (whose holdings represent
in aggregate approximately 39% of the outstanding principal of Bonds) in
relation to the proposed financial restructuring ['Restructuring'] of the
Group's balance sheet.
The key features of the Restructuring are:
* EUR123 million of the outstanding principal amount of the Bonds to be exchanged
for 723.2 million New Ordinary Shares representing 46% of the Then Issued Share
Capital, with the balance of the Bondholders' claim (including accrued but
unpaid interest) being applied to underwrite a Rights Issue;
* INM existing Shareholders to be offered an opportunity to participate in the
Restructuring by means of a Rights Issue of up to EUR94 million at a Rights Issue
Price of EUR0.05 per Rights Issue Share;
* INM existing Shareholders able to retain approximately 52% equity interest
(assuming Shareholders take up their full rights entitlements); and
* Proposed Senior Debt Facilities based upon a 4 ½ year maturity and revised
financial covenants to provide adequate headroom to accommodate prevailing
trading conditions and expectations.
The Restructuring involves a number of conditions and steps to implementation,
including Bondholder consent (75% approval by value), Bank credit committee
approvals and subsequent facility agreements having been entered into, and
requisite Shareholder approvals. A meeting of the Bondholders, at which their
consent to the Restructuring will be sought, has been convened to be held on
10th November 2009 and requisite meetings of Shareholders will also be convened
in due course.
* On foot of requisition notices served by Mr. Denis O'Brien, the Company has also
convened two extraordinary general meetings for 3 November 2009 and 13 November
2009.
Outlook for Remainder of 2009
Based on still limited visibility, the advertising trends experienced in
September and October remain challenging and are expected to continue for the
remainder of 2009. As a result, assuming a continuation of these trends and
seasonal factors, the full year operating profit before exceptionals forecast
for 2009 is expected to be in the range EUR170 million to EUR190 million.
The Group believes that a successful outcome to the Restructuring, on the basis
outlined above and if all conditions to implementation are delivered, will
provide INM with a capital structure and maturity profile that should allow a
restoration of equity value and optimally position the business for future
growth. Assuming a successful conclusion and implementation of this
Restructuring, INM will achieve a significant reduction in net debt (the
combination of the equitisation of the Bonds, the rights issue and the Group's
previously announced disposal programme resulting in deleveraging of approx.
EUR350 million, with further debt reduction anticipated in 2010) and a stabilised
financial position.
With economic fundamentals expected to recover over the medium term, INM's
market-leading assets are very well positioned to benefit from any cyclical
economic recovery. The Group's strong operating leverage, as a result of
significant operating cost reductions over the past two years and continuing
business process improvements, should facilitate incremental revenue growth
substantially translating into a much improved operating profit performance as
markets improve.
Notes:
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 Irish Stock Exchange and/or the UK Listing Authority, to reflect new
information, future events or otherwise.
Other
Defined terms used in this announcement have the same meaning as in the
announcement issued by the Group dated 28th September 2009 unless otherwise
stated. Financial results referred to in this announcement as being 'estimated'
are based on weekly management financial information. All such estimates are
unaudited. The statement as to expected full year operating profit before
exceptionals takes into account, inter alia, the Outlook Statement issued by APN
News & Media Limited on 13th October 2009. For the purposes of this IMS, the
full year operating profit before exceptionals has not been the subject of an
independent review.
+----------------------------------------+----------------------------------------+
| ENDS | 29th October 2009 |
+----------------------------------------+----------------------------------------+
For further information, please contact:
+------------------------+-------------+-----------------+
| Gavin | Chief | +353 1 466 3200 |
| O'Reilly | Executive | +353 1 466 3200 |
| Dónal | Officer | |
| Buggy | Chief | |
| | Financial | |
| | Officer | |
+------------------------+-------------+-----------------+
| Media | Rory | |
| Pat | Godson/Paul | |
| Walsh | Durman | |
| Murray | Powerscourt | |
| Consultants | (London) | |
| (Dublin) | Tel: +44 20 | |
| Tel: +353 1 | 7250 1446 | |
| 498 0300 | | |
| | | |
+------------------------+-------------+-----------------+
| Investors | | |
| and | | |
| Analysts | | |
| Mark | | |
| Kenny/Jonathan | | |
| Neilan | | |
| K Capital | | |
| Source | | |
| (Dublin) | | |
| Tel: +353 1 | | |
| 663 3680 | | |
| Email: | | |
| INM@kcapitalsource.com | | |
+------------------------+-------------+-----------------+
| | | |
+------------------------+-------------+-----------------+
ABOUT INDEPENDENT NEWS & MEDIA PLC
- CORPORATE PROFILE -
INM is a leading international newspaper and communications group, with its main
interests in Australia, India, Ireland, New Zealand, South Africa and the United
Kingdom. Spanning four continents, 10 major markets and 22 individual countries,
INM has market-leading newspaper positions in Australia (regional), India,
Indonesia, Ireland, New Zealand and South Africa. In the United Kingdom, it
publishes the flagship national title, The Independent, as well as being the
largest newspaper group in Northern Ireland.
Across these regions, the Group publishes over 200 newspaper and magazine
titles, delivering a combined weekly circulation of 32 million copies, with a
weekly audience of over 100 million consumers and includes the world's largest
read newspaper, Dainik Jagran, in India. The Group has established a strong and
growing online presence, with over 100 editorial, classified and transactional
sites.
INM is the largest radio operator - over 130 stations and an audience of
almost six million people - and outdoor advertising operator in Australasia and
also has leading outdoor advertising positions in Hong Kong, Malaysia, India,
Indonesia and across Africa.
The Group has grown consistently over the last 15 years by building a
geographically unique and diverse portfolio of market-leading brands, and today
manages gross assets of EUR2.2 billion, revenue of EUR1.4 billion and employs
approximately 8,700 people worldwide. Further information is available on the
Group's website www.inmplc.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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