INM profits and announcements

INM profits and announcements

Independent news media (INM) has made a number of announcements this week following publications of its financial state to December 2018. While there was some positive news in regards to profits for the company, failings and changes to how the company operates also followed.

This includes a new subscription plan, potential redundancies and finding new ways to offset falling advertising and publication profits.

Independent News & Media (INM) announced profits of €24.1m for 2018. This was above market expectations but included a number of large one-off costs which would have increased its profit margins even more.

While above market expectations, it was still 15% below 2017 levels.

The media companies titles include Independent.ie, Sunday independent the Sunday world and Belfast Telegraph among others. It is the largest Private owned media company in the country with some popular titles, however, it has admitted shortcomings and a need for change.

Legal costs:

The legal costs totalling €3.5 million are due to investigation in regards to data leaks and whistleblower allegations within the company.

The investigations were launched by the Office of the Director of Corporate Enforcement (ODCE) and the Data Protection Commissioner (DPC). This have led to the appointment of High Court inspectors after an alleged major data breach at the group in 2014.

“The company is co-operating with the inspectors and the DPC in their respective investigations,” said Mr Michael Doorly the companies chief executive. They do not expect costs to reach the same level in 2019.

Fall in profits

The fall in profits for 2018 has been primarily blamed on a decline in print and online advertising. As media giants such as Google and Facebook continue to consolidate online advertising, it has been increasingly difficult for media outlets to maintain previous profit margins.

There was a silver lining in regards to Classified ads, primarily with carsireland.com which saw profits increase by 18.2%.

Need for change

Its chief executive Mr Doorly and chairman Murdoch MacLennan said the company has recognised the need for change and that they have been looking at different avenue to increase the companies profitability.

Mr Murdoch said “We have recorded a financial performance for 2018 ahead of market expectations and I can assure you that despite the challenges facing the industry the board and senior executive team of your group are both determined and confident that we are heading in the right direction to build a sustainable business for the future and to create shareholder value,”.

With the rapid change within the Industry, Mr Doorly said that some tough choices must be made. He recognised that the company faces a number of challenges in the future.

“While change is happening right across our sector, which is facing the challenges of digital disruption, changing consumer behaviours and economic shifts, I am pleased to report that we are moving forward in reshaping our business to better meet the needs of our print and online readers and customers. Producing quality content remains essential to the future of our business and to that end the calibre of our editorial team is unmatched in the Irish market. I would like to thank all of my colleagues in INM for their continued commitment and resolve in delivering to date on our new strategy,” he said.

Plans for the Future

Earlier this year INM told staff that is expected to make 30 redundancies across the business, as management unveiled its new strategic three-year plan reported RTE.

Among the changes INM plan to introduce a subscription service to its online publications. It hoped to roll out this project by 2020. This is hoped to reduce the reliance on online advertising.

“We can’t just slap up a paywall. We need to be able to understand our audience,” Mr Doorly said. Recognising that some customers will be turned away by these announcements.

It is hoped that their apps and websites will also be updated for better user experiences.

 “We will continue to confront the many challenges currently dominating our industry’s wide agenda, including the unfettered advance of the global technology platforms such as Google and Facebook, the inexorable rise of fake news and the cold climate for consolidation in the Irish market as a result of inadequacies in the competition approval process, not to mention our outdated libel and legal regime.”relayed the Irish Times.

Some publications in Ireland already use a subscription model on various topics including the Irish Times. It is not yet known how INM will introduce the subscription model to its publications.

With a new business plan going forward and an ever-changing environment, it is an exciting and challenging time for media of all kinds.

Sterling Drops In Value As Economy Set To Stagnate Despite recent growth

Sterling Drops In Value As Economy Set To Stagnate Despite recent growth

On the 9th of November, Caitlin Morrison of INDEPENDENT news reported that the pound dipped after rallying in recent weeks. This was following recent Brexit talks which looked positive. Following the release of UK data showing a successful hike in productivity and economic growth on Friday, the pound dropped against the dollar and the euro.

The 0.6% growth in the UK economy in the three months to September was recorded as the highest quarterly growth rate since 2016. The Fourth quarter of 2016 had seen a growth of 0.7%. The figures predicted by the Bank of England and other forecasters were expected to be much better had it not been for the flatlining recorded in the last month of the third quarter. The buoyant growth in July was upset by the decline in August and September leading to a reduced but record-breaking quarterly growth rate.

Growth and decline

The ONS reported, that in September UK manufacturing grew 0.2% following a slight contraction in August. Construction grew 1.7% after deep falls in output during the snowstorms early this year. But services, which make up the bulk of the UK economy contracted 0.1% during the month.

In the third quarter, business investment fell 1.2%, the worst three- month performance since early 2016. It was also the third quarter of contraction in a row – marking the worst run since the last recession. Surveys suggested Brexit-related uncertainty is causing firms to freeze spending.

The bank of England expects growth in the final quarter to decelerate to 0.3%. There was slightly better news from the ONS on UK trade with the statistics agency reporting the trade deficit fell to £2.9bn in the three months to September, down from £6.1bn.

Just after these statistics were revealed in the UK, the US indicated that a pre-Christmas hike was on the cards. The pound sterling dropped more than 0.3% against the greenback to $1.3021 and fell 0.21% against the euro to €1.1471. The US federal reserve’s indication that it will hike rates in December to strengthen the dollar and the stagnation of the British economy in September has only been compounded by Brexit talks

Brexit talks

Schroders senior European economist, Azad Zangana said “The economy is not forecast to pick up in the near term, we expect the UK fourth-quarter growth to be very weak as Brexit paralysis takes hold. Assuming the government can successfully negotiate the withdrawal agreement with Brussels and ratify it in parliament, then we could see a rebound in growth early next year. However, a failure to complete a deal which would mean a no deal or cliff-edge Brexit is likely to cause a further slowdown in activity which could be enough to tip the UK into recession.”

The pound sterling has thus been gripped with volatility amid uncertainty about whether the UK will leave the EU next March without a trade deal in place. A lack of clarity on the direction of Britain’s future has caused a weakening in optimism for the economy and recent growth speculation.

The Sterling’s recent struggles due to Brexit have not been helped by comments from the former foreign secretary and leading Brexiteer Boris Johnson. Johnson called on his former Cabinet colleagues to stage a mutiny over Theresa May’s Brexit plans. Boris Johnson comments in a newspaper column that the prime minister was “on the verge of a total surrender” to Brussels added to the fire. There has been pressure on the other side of the debate from MPs as Mr Johnson’s younger brother Jo Johnson resigned last week saying the UK was “barreling towards an incoherent Brexit’ and calling for a fresh referendum.

The former education secretary, Justine Greening – who backed Remain in the 2016 vote joined the list of critics. She told the BBC on Monday that Mrs May’s plans represented “the worst of all worlds” and that MPs would reject it.

Head of research at London Capital Group, Jasper Lawler said: “As pressure mounts on May, Brexit and politics will be critical once again to the pound this week.” While talks continue the Sterling will remain in a precarious position. As to will much of the UK economy.

Many experts also point to World cup spending as being a major factor in some of the recent reports positive feedback. With uncertainty over Brexit still remaining the Sterlings strength on the economic market will be watched closely by business owners and politicians.

The fate of the UK economy relies a lot on the Brexit deal, With negotiations on going and political moves being made, we stull have to wait for a final outcome and its impact on the economy.