Buy cheap INM as recovery takes hold

The company's digital strategy has centred on transferring its editorial operations in to a digital content hub, offering more multimedia content and breaking news, strengthening its social media presence and catering to mobile viewers. The payoff is clear. INM's three main publishing websites recorded 13.6m unique visits in July, more than double the figure in July 2013. That helped lift digital revenues by a third in the 11 months to 14 November, an increase on first-half growth of 30 per cent.

This growth is now more than offsetting the underlying decline in print advertising, that ran at 2.6 per cent over the 11 months. In fact, underlying advertising revenues are up 0.4 per cent in the period compared with a first-half decline of 0.3 per cent. Falling circulation revenues and the closure of a free sheet means overall revenues are down 2.2 per cent, but it looks like a turning point has been reached. What's more, the resurgent Irish economy should provide a welcome tailwind.

Plenty of work has been put in to get here. The group significantly strengthened its balance sheet last year with the sale of its South African operations for €151m (£119.81), and had a €40m equity issue. That allowed it to slash its net debt by more than three-quarters to €95m. It also reduced its pension by €111m by resyructuring members' benefits.

INM has also streamlined its business. It has lowered its operating costs by 2.8 per cent this year, following a 7.3 per cent reduction last year. Its cost-cutting programme, 'Project Resolute', generated €26m in cost savings while boosting revenue, and successor Project Quantum is under way. INM has also refreshed its leadership by appointing a new chief executive and finance director.

The company has been diversifying into other growth areas, too. Revenues from its classified sites, which include nijobfinder.co.uk and propertynews.com, rose a fifth last year. And daily deals website GrabOne posted a 29 per cent rise in sales last year, as it secured a 19 per cent share of the coupon market.

Despite its digital investments, INM’s first-half underlying net profit doubled to €14m. And,s promisingly, the group is diversifying away from volatile advertising revenues. It acquired RecruitNI, a Northern Irish jobs portal, and took full control of Australian Radio Network. That has expanded its overseas presence - it already owns 30 per cent of publisher APN, which posted a 10 per cent rise in underlying pre-tax profit to A$60m (£33m) last year.