Irish Daily Star - Financial Accounts

JTMan

Independent Star, which is 50% owned by INM and 50% owned by N&S, have published their accounts for year ended 26 December 2014.

Very interest to compare the below to the Boards.ie comments on the 2013 accounts here.

• Turnover fell from 23.8 million to 21.7 million.
• Cost of sales fell from 14.8 million to 13.8 million.
• Distribution and marketing expenses was static at 3.5 million.
• Profit down from 1.7 million to 1.4 million. (would have been worse except for viscous cuts)
• Cash up to 1.7 million (by coincidence, not typo, the same figure as the profit figure).
• Dividend fell from 2.7 million to 1.0 million (Desmond gets 0.5 million pocket-money).
• Employees fell from 68 to 61.
• Wages fell from 4.9 million to 4.6 million.
• Creditors fell from from 3.8 to 3.4 million.
• 1 director resigned during the year.
• BDO, the auditors, said that there was "going concern risk" due to declining newspaper sales but BDO still allowed account preparation on a going concern basis.
• Total net assets are a tiny 0.5 million. Kept positive by a reduced dividend.

Desmond is still taking as much money from this newspaper business as he can before it collapses. The company is getting stripped to the bone, staff numbers are plunging, wages are plunging and sales are plunging off a cliff.

However, thanks to all the viscous cuts, it is still a profitable newspaper business as at 26 December 2014. Cuts can only go so far, newspaper sales are only going one way and therefore profitability will be short lived.

Irish Daily Star sales have continued to plunge in 2015. Desmond is looking to offload his UK newspaper assets but that seems to have stalled.

Interesting that marketing and distribution expenses were static. Given that Independent Star don't do a massive amount of marketing, it might be safe to assume that the majority of the 3.5 million is a fixed national distribution cost.

Ho much longer can they keep their head above water via cuts?

Szero

How long The Irish Daily Star lasts depends on how much more cuts Independent Star can endure.

How many employees is the minimum that you can run a daily national title on? Metro ran their city only title with 13 staff. Perhaps, a daily national title, of the size of the The Irish Daily Star, needs a minimum of circa 35 staff?

Why are distribution costs not coming down? Is distribution costs more-or-less a fixed cost?

What is 6 million in cost of sales that is not employee costs? Publication costs? Lease costs? Do INM not charge IS a cost per copy? Should this not be declining in line with circulation as less copies are published?

Wild guess. 2 years left.

IRE60

Cost of sales would be "publishing" - somewhat proportional to circulation numbers taking in pre-press and printing (IMO).

I'd suggest that distribution is a mainly fixed cost with a variable element for 'specials' ie one off promos or additional mags above an beyond whats in the fixed contract.

The Metro, as did the A.M., re-cycle and had very little in terms of 'journalists' - page production and sales were the only two necessary.

Normally an optimist: but I'd say there will be some 'fracture' in the morning market in the next 24 months - it might be a closure or indeed a merger. It will allow other parties to limp along a little longer.