03/11/2008

Independent News To Merge 'Back Office' Services

A leading Irish media group is seeking to merge much of its 'back office' services - even involving competitors' businesses.

Independent News & Media (INM) wants to merge the newspapers' human resources, IT and accounts with those of other publishers in order to slash costs.

There may also be a danger to jobs in the face of a worsening advertising market, which has seen retail and brand advertising plunge in the UK.

The company is already believed to be close to one deal which would see some of its non-editorial newspaper functions effectively shared with another publisher.

INM's Chief Executive and largest shareholder, Sir Anthony O'Reilly, also reiterated his call for the company to dispose of its UK assets describing them as "a drain on group resources".

INM's drive to cut costs and reduce its debts, comes as the global economic crisis takes its toll on the advertising market. The company, which owns newspapers and other media assets in Africa, Australia, New Zealand and the Far East, said its recent performance in the UK and Ireland has been particularly weak.

During September and October, property and recruitment advertising continued the "very weak" trend set earlier in the year.

In the year so far, INM's operating profits are down 10%. For the year as a whole, the company now expects total revenues to be down 11% - in euros - with advertising down 2.5% in local currencies and overall profits - in euros - to be down between 15% and 17%.

(BMcC)

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