INM shares slide 12% on ODCE probe costs
INM shares shed 12% of their value after the media firm issued a profits warning involving the costs linked to the probe by the ODCE, the Office of the Director of Corporate Enforcement.
The warning will mean INM will likely report pre-tax profits of €25m to €26m this year, compared with market expectations of over €30m, and down from the €41.8m earned in 2016, said analyst Rachel Fox at Goodbody. “We currently forecast print advertising revenue declines of 12% and digital advertising revenue growth of 6%, both of which will now be revised downwards,” Ms Fox said.
INM shares have now fallen over 25% this year. Last month, Robert Pitt resigned as chief executive extraordinary row that had raged in the media company for over a year. He had used whistleblowing legislation over a row involving a potential acquisition of broadcaster Newstalk.
INM was subsequently asked by the ODCE for documents involving the row.
In the statement, INM said: “In line with recent global trends in the media industry, INM continues to face ongoing revenue challenges with continued uncertainty in the market, including Brexit.
“Legal costs related to the independent review and meeting the ongoing requirements of the Office of the Director of Corporate Enforcement have been significantly higher than previously estimated”.
Davy said that after the appointment of Michael Doorly as INM’s CEO, “the question for shareholders is whether or not the group is more inclined to return excess cash to shareholders”.
INM holds €96m in cash.
