Legal costs squeeze profits at Independent News and Media
Shares in newspaper company Independent News and Media fell by three per cent this morning as the publisher blamed losses on costs related to an investigation by Ireland's corporate watchdog into an alleged data breach.
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The figures
Total revenue was down 4.1 per cent to €95m (£85.20m) at the publisher of the Irish Independent and Belfast Telegraph, while digital revenue was down 2.9 per cent, it revealed in its half year results.
Redundancies at the company didn't help profit rise, with profit before tax falling by 22 per cent to €11.5m in the period ended 30 June 2018.
Why it's interesting
The group recorded an exceptional cost of €1.9m in legal costs it had to pay to meet the Office of the Director of Corporate Enforcement's (ODCE's) enquiries into an alleged data breach in 2014, which only recently came to light. The suspected breach, which is still being investigated by the Office of the Data Protection Commissioner (DPC), may have exposed journalists' sources.
A charge of €1.3m was connected to the company's restructuring plans, primarily focused on redundancies.
Further cost saving plans as part of the so-called protect the core strategy have been put in place for the second half of 2018.
What the chairman said:
Chairman Murdoch MacLennan said: "The media industry continues to experience challenging trading conditions, while the group must also contend with uncertainty as a result of the ODCE's attempt to have inspectors appointed to look into a number of events that took place in recent years and the ongoing DPC investigation of alleged data breaches within Independent News and Media.
"We are mindful of the rapidly changing landscape of the media industry with digital companies leveraging different technologies to directly engage with the consumer. However, this does not undermine the continued quality content produced by INM which remains a trusted source for news.
"The group's new strategy is also making progress and a new senior executive team has been put in place to support our group chief executive, Michael Doorly, as he leads its implementation. Our balance sheet remains strong and we continue to explore new avenues to develop profitable revenue streams to support our core business."
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