Independent News chief cautious on advertising

Gavin O’Reilly, chief operating officer of the group behind The Independent, has given warning against forecasting any newspaper advertising growth in the year’s second half, amid concern about effects of the credit squeeze.

Speaking as Independent News & Media (IN&M) reported interim results, Mr O’Reilly said that the “squeeze can only but have a sobering effect on the UK market, so that any growth that one might have hoped for in the second half has now been factored out of our forecasts”.

The newspaper publisher, based in Dublin, is now predicting that its full-year advertising revenue in the UK will be flat. However, in the first half, with online included, there was a 7.1 per cent increase, driven largely by growth for The Belfast Telegraph.

Sentiment around the British advertising market had been improving in recent weeks, with a two-year down-turn seen as gradually coming to an end. Last week ZenithOptimedia, the forecaster, said that it was raising its growth predictions for 2008, but that has not proved enough to reassure.

IN&M’s profits eased 13.5 per cent to €94.1 million (£65.3 million), after one-off charges of €27.6 million, principally from 579 job cuts, mainly in back office, in its British, Irish and Australasian operations. The cuts will continue in the second half, generating a €45 million charge over the year.

Operating profits in Britain, where the success of The Belfast Telegraph outweighs losses at The Independent and the Independent on Sunday, were 19.7 per cent ahead at €7.3 million.

IN&M has been in dispute with Denis O’Brien, a 9 per cent shareholder, who has called for a shake-up of the group. Mr O’Brien is travelling in America and had not studied yesterday’s figures. However, it is understood that lawyers for Sir Anthony O’Reilly, IN&M’s chief executive, have demanded that Mr O’Brien’s spokesman apologise for issuing a corporate governance analysis critical of the management of the business.

Dan Sabbagh
The Times
19th September