INM shares rally after pensions deal

Shares in Independent News and Media (INM) rallied yesterday, after a turbulent week ended with the group announcing a deal for pension scheme members.

INM has lost a quarter of its market value, since the turn of the year.

There were further erosions earlier this week, with two days of heavy selling by institutional investors, after management warned that this year’s pre-tax profits would fall short of target, due to a combination of market challenges — from weak digital and advertising revenues to Brexit uncertainties — and costs related to legacy libel issues and probes into its corporate governance practices.

Yesterday, however, the stock rose by 8.5%, driven by final clarity on its long- running pension-scheme dispute. In an agreement to wind-up two defined-benefit pension schemes, INM will pay an annual €8m for the next seven years to members, and an up-front contribution.

That figure, while not disclosed, is believed to be €10m, which would be lower than analyst expectations.

“The agreement also allows INM to re-engage with its capital restructure plan, as submitted to shareholders at an EGM in December. This plan would ensure that any resumption of normal dividends by INM would be payable out of future earnings,” Davy Stockbrokers said.

“In the absence of M&A opportunities, which INM has now put on hold, we believe this positions the group strongly to resume a steady dividend policy,” it added.

Meanwhile, while still opposed to INM closing its pension schemes, the National Union of Journalists welcomed the decision to continue pension contributions until 2023.

It said the matter highlights the need for law reform and has called for legislation “to prevent solvent companies unilaterally winding up defined-benefit company schemes”.

“We call on the Minister for Employment and Social Protection, Regina Doherty, to clarify when legislation promised by her predecessor, the current Taoiseach, will be presented to the Oireachtas.

“In circumstances where there is all-party agreement on this issue, there is no reason why legislation should not have been introduced, and passed, before the summer recess,” said NUJ acting general secretary, Séamus Dooley.

Merrion said its stance on INM remains “under review”, after removing its ‘buy’ tag on the stock earlier in the week.

“The announcement adds certainty to future cash-flow outcomes, albeit negatively, and may positively influence potential acquirers of INM in any forthcoming due-diligence process,” said analyst, Darren McKinley.

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