INM GROWS UNDERLYING† REVENUE & OPERATING PROFIT 

BY 3.0% AND 8.9% RESPECTIVELY

Dublin/London 27th August 2008:  The Board of Independent News & Media PLC ["INM" or the "Group"] (ticker: Bloomberg - INM.ID; INM.LN: Reuters - INME.I; INME.L) today announced the Group's first half results for the six months ended 30th June 2008. A detailed investor presentation of these results is available on the Group's website www.inmplc.com.

† "Underlying" = in constant currency terms        *   before exceptional items

                            ** diluted EPS, before exceptional items

SUMMARY HIGHLIGHTS 

Financial & Operating Highlights

• Group Revenue, of €780.4 million, grew 3% in underlying terms for the six months to 30th June 2008, reflecting an impressive performance in challenging advertising markets

• Underlying advertising and circulation revenues were ahead of the prior year, both including and excluding acquisitions

• A robust performance by all regions and lower exceptional charges drove underlying Operating Profit up 8.9% 

• Group underlying Online revenue increased 23.3%, reflecting good organic growth and a continuation of its multi-media investment strategy across all regions; revenue increased 57.1% including associates

• Net Profit up 28.2%, reflecting solid operating performances and lower exceptional charges

• Basic EPS increased 20.0% to 6.0 cent

• Interim dividend maintained at 4.57 cent per share 

• New Bank Facility recently signed to refinance the €125 million 8% Bond on maturity in December 2008

Strategic Highlights

• INM's proven strategy of global diversification, innovation and cost efficiency delivered a good performance in difficult market conditions - ahead of peer group

• Successful consolidation of INM's Outdoor interests in Africa following acquisition of outstanding 50% interest in Clear Channel Independent ["CCI"], bringing INM's ownership to 100% in March 2008

• Continued strategic expansion of INM's Asian exposure, with the recent investment of 20% in leading Indonesian media group - PT Abdi Bangsa Tbk.

   INTERIM MANAGEMENT REPORT

- OVERVIEW -

The Group's first half results for the six months ended 30th June 2008 represent a very good performance in a global market that is experiencing adverse economic pressures and advertising volatility.

Reported revenue for the first half in euro terms (including acquisitions), at €780.4 million, was down 3.7% on the comparative period last year. This was mainly due to adverse currency movements as underlying revenue increased 3.0% in the period.  Excluding acquisitions, underlying revenue was up 1.5% on the comparative period last year.

While the global media advertising market has been directly impacted by the current economic down-turn, the Group's advertising revenue (including acquisitions) was up 2.8% in underlying terms. Excluding the impact of the acquisitions, underlying Group advertising revenue increased 0.6%.

In the Group's Publishing division, underlying advertising revenues declined by 0.9% (or c. €4.0 million). Circulation revenues for the first half of 2008, although down on euro translation, were up 2.0% in underlying terms. The Group's Online operations continue to expand at a rapid pace, with underlying revenues up 23.3%.  Including the Group's share of online associates' revenue, the growth rate was strong at 57.1%.  The Group's Outdoor division reported a strong revenue uplift of 23.6%, reflecting a very good performance by APN Outdoor and the acquisition of CCI in Africa from the end of March.  APN's Radio operations experienced very competitive market conditions and underlying revenue was down 3.9%, but good market share gains were achieved in the second quarter.

During the period under review, the Group proactively managed the weak global advertising environment by implementing advertising yield increases where prudent to do so, targeted cover price increases and further focusing on achieving cost efficiencies across all operations. Total underlying Group costs (excluding acquisitions) were up 1.4%.  These cost increases were mainly driven by the strong outdoor advertising revenue performance (specifically, site rental costs), depreciation, energy costs, continuing investment in marketing, new product innovation and online, and increases in wage rates. Cost increases were moderated by the benefits of headcount restructurings (both this year and last year), improved processes (via new technology and outsourcing) and newsprint price decreases in certain markets.

Operating Profit before exceptionals was marginally down on the first half of 2007, but was up 2.1% in underlying terms, with the Group operating margin increasing by 60bps to 19.7%. This margin increase was assisted by the Group's South African Rand foreign exchange hedge. The Exceptional Charge of €19.0 million in the period primarily relates to headcount restructuring charges (€13.1 million) across all regions and to certain online and education start-up development costs (€6.0m). INM remains committed to continuously assessing and streamlining workflows to ensure the most efficient and modern work practices exist throughout its businesses and this is particularly relevant in the current weak economic environment. The restructuring charge of €13.1 million represents a headcount reduction of 189, of which 143 had departed by 30 June 2008. The expected payback on these redundancies is approx. 2.5 years.

Operating Profit after exceptionals increased by 6.1% (8.9% in underlying terms) to €134.8 million and Profit After Tax increased 5.6% (7.9% in underlying terms) for the six months to 30th June, reflecting the resilient operating performance and lower exceptional charges.

Basic Earnings Per Share was up 20.0% on 2007, with the 28.2% increase in Net Profit after Minority Interests partly offset by the increase in shares in issue. Average shares in issue increased by 6.0% on last year mainly as a result of the conversion of the New Zealand CEPS in November 2007 (largely offset by Treasury shares bought back during the second half of 2007) and the issue of shares in March 2008 for the CCI and The Sligo Champion acquisitions. Excluding the impact of exceptional items year-on-year, Adjusted EPS, at 7.5 cent, was down 6.3%.

Group Net Debt increased by €88.2 million since 31 December 2007, primarily driven by acquisitions, capital expenditure on print plants and the timing of interest and dividend payments. 

Significantly, INM has just completed a new 4-year bank facility for €105 million. This will be used to fund the redemption of the €112.6 million outstanding under the Group's €125 million Bond on maturity in December 2008.

Since 30th June, the Group has continued to expand its global reach and diversity, and recently announced the completion of its 20% investment in PT Abdi Bangsa Tbk., publisher of "Republika" one of Indonesia's largest circulating national daily newspapers. PT Abdi Bangsa Tbk. also has interests in online publishing, radio, magazine publishing and outdoor advertising. 

- DIVIDEND -

The Board is recommending an interim dividend of 4.57 cent per share, which is flat on last year, reflecting the Group's solid performance in the current challenging economic environment. This dividend will be paid on 7th November 2008 to ordinary shareholders registered at the close of business on 12th September 2008. A scrip dividend alternative will also be available.

- OUTLOOK -

Commenting on these results, Sir Anthony O'Reilly, Group Chief Executive Officer, made the following outlook statement:

"The current economic climate presents a challenge to all media companies throughout the world. It also presents opportunities, not least the potential for joint ventures, shared investments, mergers and divestments which may change perceptions of the structure and nature of media.

"The pattern of these unusual structural opportunities will, we believe, be of benefit to shareholders, and bring renewed confidence back to the sector as the global economy goes through its present recessionary period.

"While it is difficult to forecast advertising revenues reliably for the second half - as we have only experienced the two traditionally quiet summer months - trading in the next three months leading up to Christmas, will be critical in determining the full year result.  However, as second half comparators are easier and, assuming a continuation of the first half advertising trends, INM believes that it will achieve profits in line with consensus forecasts for the full year.

"The Group's core business model - global diversification, exposure to multi-media platforms, leading brands and striving to be the low cost operator - continues to provide resilience against the current economic downturn and positions your Company well to benefit from any improvements in general market conditions."

  - OPERATIONS REVIEW -

AUSTRALASIA

APN News & Media Ltd ["APN"], in which INM holds a 39.1% shareholding, is listed on the Australian and New Zealand Stock Exchanges. Underlying revenue and operating profit before exceptionals increased by 2.7% and 0.1% respectively for the first six months of 2008. 

The Regional Publishing division, which publishes 23 regional daily newspapers and more than 100 non-daily and community titles across Australia and New Zealand, reported first half revenues up 2%. In Australia, the continued strong resources sector in the Queensland markets and good growth in rural commodities provided a backdrop for solid trading conditions, with classified advertising in property and recruitment again returning double-digit growth. Northern Queensland, a key growth market for APN titles, was affected by widespread floods in the first quarter, whilst in New Zealand, local economic conditions remained subdued. The major press re-equipment programme has now been completed, facilitating full colour and gloss capability for all of APN's major titles.

The New Zealand National Publishing division comprises The New Zealand Herald, Herald on Sunday, The Aucklander and New Zealand magazines. The division leads the Auckland market, with more than 70% of Aucklanders aged 15+ reading at least one APN title each week. General economic conditions remain challenging in New Zealand and underlying revenues contracted by 5% on the same period last year. The advertising environment was acutely competitive and, while national advertising performed well, other pillars (most notably, retail, property and recruitment) experienced continuing weakness. Paid circulation in The New Zealand Herald was stable and there were good circulation gains for the Herald on Sunday. There was also good growth in readership in the most recent survey period (April 2007 - March 2008), with The New Zealand Herald (+6%) and the Herald on Sunday (+13%) the fastest growing paid newspapers in the country.

APN continues to invest in its Online division, which is achieving good organic revenue growth. Its flagship site, nzherald.co.nz, New Zealand's largest news website, was recently named best news site at the Qantas Media Awards. In New Zealand, the finda online business directory continues to generate record traffic levels, up 37% in the first half. Finda remains New Zealand's largest online business directory.  In Australia, the division's regional strategy was launched with the community-based finda websites in Toowoomba and the Sunshine Coast. The sites integrate existing online newspaper content with events, mapping and local business listings to build comprehensive local web resources.

The Radio division, which comprises the Australian Radio Network (ARN) and The Radio Network (TRN) in New Zealand, is Australasia's largest radio broadcaster. Together ARN and TRN reach almost 6 million listeners each week. In Australia, good gains were made in the second quarter in terms of commercial market share. Despite challenging market conditions in New Zealand, TRN remains the market leader in New Zealand radio, with the number 1 talk station in Auckland, Wellington and Christchurch.

APN Outdoor is the market leader in each of the main outdoor advertising categories in Australia and New Zealand, as well as being a major player in large format in Indonesia and Malaysia and in transit and large format in Hong Kong. The division delivered a very strong operating result, with particularly good growth in Australia and Asia with underlying revenues ahead by 14%. Since the half year, APN has acquired the operations of Media1, the third largest billboard company in New Zealand, further consolidating its position as the leading outdoor operator in New Zealand.

IRELAND

Overall revenues increased by 0.5% to €199.3 million, with good increases in circulation and distribution revenues partly offset by reduced advertising revenues. Advertising revenues declined 5.7% year-on-year, with significantly reduced property and recruitment advertising revenues, offset in part by strong ROP, retail and online performances.

Despite a marginal decline in first half operating profit before exceptionals to €47.0 million, operating margins remain very strong at 23.6%. The reduced operating profit reflects the increased investment in online activities and marketing in the first half and the impact of reduced advertising revenues, which was partly offset by increased revenues from the lower margin distribution business and stringent control of costs across all business units.

Distribution revenues increased by 6.1% in the first six months of 2008, driven by cover price increases and a number of magazine contract wins in the previous year. The ongoing market-leading strength of the Group's distribution business will be further underpinned by the installation of a new state-of-the-art SAP distribution system, which will be completed around year-end.

In one of the most competitive newspaper markets in the world, INM's circulation revenues grew by an impressive 5.9% in the first half of 2008. This excellent performance was underpinned by selective cover price increases, together with solid circulation volumes. The Irish Independent continues to be the clear number one newspaper in Ireland, recording an ABC of 159,363 copies in the January to June 2008 ABC period. The Sunday Independent, the largest selling Sunday newspaper in the Republic of Ireland, delivered another solid result, with a sale of 283,024 copies in the six month ABC period, while the Evening Herald continues to show the strength and resilience of its brand in a Dublin market which shows an ever increasing volume of freesheets, in returning an ABC for the January to June 2008 period of 79,447 copies.

The Sunday World continued its excellent growth of the recent past and consolidated its position as the largest selling newspaper on the island of Ireland, recording an ABC of 292,124 copies, up 3.3% on the same period last year. The Group's joint venture publication, the Irish Daily Star continued its circulation growth and delivered a daily sale of 109,413 copies in the January to June ABC period, an increase of 3.2% over the same period last year. Its sister publication, the Irish Daily Star Sunday continues to perform well, achieving a January to June 2008 ABC of 61,376 copies.

The Group continued to expand its online footprint during the first half of 2008, with the launch of the yourlocal.ie and herald.ie websites. The launch of these sites and further good progress across the remainder of the Group's online publishing and classified platforms helped to drive an impressive 19.7% increase in online revenues.

In other activities, the Group continued its national rollout of its local telephone-services directories, Independent Directory, with the successful launch of a new directory in the Galway region, bringing the number of regional directories to seven.

Good progress also continues to be made at Independent Colleges with new, excellently located, central Dublin premises, the awarding of gold status by ACCA after only eight months in operation, and degree validation for its LLB (Hons) course by the University of West England.

  SOUTH AFRICA

The South African operation performed extremely well in a somewhat tougher trading environment, which has not been entirely immune to the global economic down-turn. The lagged effect of the upward interest rate cycle (with interest rates having increased by 450bps since June 2006), increased inflationary pressures and adverse currency shifts have impacted consumer sentiment somewhat, with ongoing infrastructural development now underpinning current economic growth.

Total revenue and operating profit before exceptionals were up 13.7% and 34.6% respectively in the first half of 2008. Excluding the CCI acquisition, revenue and operating profit before exceptionals grew 3.4% and 18.5% respectively, demonstrating the strong operational leverage and ever-strong cost containment that is a feature of our South African division.  Overall, the underlying operating profit margin expanded by 320bps to 21.1%.  In Euro terms, the margin was assisted by the South African Rand currency hedge and increased to 25.4%.

Against record prior year comparators, publishing advertising revenue grew by a more modest 2.3%, with display and classified advertising market shares maintained, despite very aggressive competition and price discounting in a highly competitive trading climate. Circulation revenue grew by 7.0%, driven by cover price increases across all titles.   The Group's leading Zulu-language daily newspaper, Isolezwe continues to show good circulation sales growth, with a January to June 2008 ABC of 96,920 copies and regularly selling well over 100,000 copies on Mondays and Fridays. A separate Sunday edition of Isolezwe (Isolezwe ngeSonto) was successfully launched on 30^th March - and has exceeded launch expectations. 

Full control of the Group's Outdoor Advertising business, Clear Channel Independent, was acquired with effect from 27th March 2008 and will soon be rebranded as INM Outdoor.  In addition to its market-leading South African division (a country which will host the 2010 FIFA World Cup), a strong presence in high-growth markets outside South Africa has enhanced the profit contribution. Further expansion opportunities are being considered and the business has recently expanded into Madagascar; the division now operates in 13 countries outside of South Africa.

The wholly-owned Magazine division (Condé Nast Independent Magazines) produced a good first half trading profit improvement with "House & Garden" celebrating its 10th Anniversary in March and continuing its market-leading number one position in the South African Home Décor market.  

Development of the Group's Online presence remains on course with the re-launch of South Africa's largest property website, iolproperty.co.za, which is now the clear market leader in terms of volumes, search capability and functionality. 

  UNITED KINGDOM