Independent News and Media issues profit warning

Independent News and Media has warned its 2009 profit will be about €20m lower than previously expected.

In a statement issued after its annual general meeting in Dublin this morning, the Independent and Belfast Telegraph publisher said conditions remained “extremely challenging”.

At the end of April, INM predicted that its operating profit would be in the region of €200m-230m. This has now been revised down to €180m-210m.

The company made no comment on reports that it is close to agreeing the sale of the Independent titles to London Evening Standard owner Alexander Lebedev.

But INM did confirm that it expected to dispose of a number of “non-core assets” including its African outdoor advertising business, German price comparison website and British gaming business, for a total of about €150m before the end of September.

INM chairman Brian Hillery said the company remained “profitable and cash-generative”.

“Our management have been relentlessly focused on cost control and have led by example by taking substantial voluntary pay cuts,” he said.

“Our operating discipline and strong media franchises leave us well-placed to benefit from a return to economic growth.”

Hillery added: “This is a good company with excellent assets and a rigorously focussed management team, albeit operating in a tough industry at a time of almost unprecedented economic conditions.”

INM has until 26 June to renegotiate the terms of a €200m bond that was due to be repaid at the end of April.

The group managed to secure a last-minute reprieve as it attempted to find enough cash to pay back the loan. It said today it was confident that new terms would be agreed.

“The timing of our bond maturity has accentuated the challenges,” Hillery told today’s AGM. “We look forward to completing our refinancing and focusing on our core business.”

He added: “A comprehensive refinancing and extension of maturities will position us to benefit from the economic recovery in our markets when it occurs.”

Shares in Independent News and Media were up 17.5 per cent by 3pm today at €0.29.

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