Independent News & Media (IN&M) has reported "record" interim results, with turnover for the first six months of the year up 14 per cent to €737 million. Operating profit from continuing operations before exceptional items was ahead 25.1 per cent to €129.4 million in the six months to the end of June.
Mr Gavin O'Reilly, the chief operating officer, said the group found itself in the happy position where, for the first time in five years, revenue and circulation was growing in each of its four markets.
Earnings per share in the six months were 4.67 cent and Mr O'Reilly said, "We are very comfortable with market expectations for 2004, which point towards earnings of 14 cent per share". A dividend of 3 cents per share was declared.
Mr O'Reilly added that the company expected to do better than the 10-11 per cent growth in earnings for 2005 that most analysts are predicting. He said his optimism was based on current revenue trends and expected savings as the benefits of the company's restructuring programme fed through.
The company plans to have cut €19 million in recurring costs by the end of 2005 through a combination of outsourcing and redundancies, primarily in its Irish operations.
Mr Vincent Crowley, the chief executive of Independent News & Media Ireland, said the restructuring process - which has seen 208 people leave under a voluntary redundancy scheme - was now complete. He said the company was not planning any further redundancies among its editorial staff, but would keep its cost base under review.
Turnover at the Irish operation - whose publications include the Irish Independent and the Sunday Independent - was up 7.5 per cent to €189.6 million, while operating profits were up by 8.5 per cent to €40.9 million.
The company attributed a 3.7 per cent rise in circulation revenues to "core yield improvements" in all its titles and the "very successful launch of the compact edition of the Irish Independent". Mr Crowley said there were no plans "for the foreseeable future" to move to a compact-only edition, as with the Independent in the UK.
Mr O'Reilly said the company had negotiated a 16 per cent rate increase with UK advertising agencies to reflect the 21 per cent rise in the Independent's circulation. A six-month stand-off with a number of agencies over rates means that the title is expected to return to profit in mid-2006, rather than the end 2005 as originally hoped. The losses for this year are expected to be less than the £9 million (€13 million) incurred last year.
Turnover at the UK division, which includes the Belfast Telegraph, was €100 million, up 8 per cent on continuing operations (the group disposed of its UK regional press business to Archant last year). Profits were up 30 per cent at €7.4 million.
Circulation weakness at the Belfast Telegraph reflected a decision to cut back on discounted or bulk sales to improve yields, said Mr O'Reilly.
The costs associated with the move to a compact-only edition of the Independent accounted for around €7 million of the exceptional charge against the profit- and-loss account of €10.8 million in the period. Exceptional costs associated with the compact edition of the Irish Independent were €2 million. The launch of a magazine in South Africa accounted for the bulk of the remainder.
Turnover in South Africa grew 12.8 per cent to €92.8 million, while operating profits were up 31 per cent to €11.6 million. The South African titles achieved double-digit advertising and circulation growth on the back of strong consumer spending, which in turn was driven by a stable rand and historically low interest rates, said the company
APN, the Australian media group in which IN&M has a 40 per cent stake, reported results last month. Operating profits were up 19.5 per cent to 125.4 million Australian dollars (€71.7 million) and turnover up 8.3 per cent to A$586.6 million. The strengthening of the Australian dollar mean these increases translated into a 17 per cent increase in turnover in euro terms and a 27 per cent increase in operating profits.
Profit on ordinary activities after taxation and minority interests - which strips out the impact on profits of the 60 per cent of APN that IN&M does not own - were €34.4 million, up from €22.2 million.
The shares were unchanged at €2.07.
