Indo group profits rise by 42%

PROFITS at Independent News & Media jumped nearly 42% last year largely due to a strong contribution from its papers in Ireland and South Africa.

Including the gains on the sale of its stake in ringtones firm iTouch and the disposal of a printing site in Dublin, pre-tax profits in 2005 were €272.5 million, up from the previous year’s €192m.

Group revenues were 7.5% higher at €1.61 billion, though newspaper circulation revenue growth was slower than the increase in advertising revenues.

Independent’s Irish titles saw a 10% rise in operating profits to €90.6m on revenues of €401.7m. The company said ad revenue in Ireland was higher, making up for declining readership of its flagship Irish Independent.

The company said it was winning the battle of the Dublin freesheet newspaper market, with its HeraldAM title achieving higher circulation than Dáily Mail-owned rival Metro.

The closure of its Terenure printing site, the launch of new papers and a redundancy programme cost the company nearly €5.1m, offsetting some of the profits from the iTouch disposal.

In South Africa, Independent generated operating profits of €41.8m, up €11.8m on 2004, as revenues rose by €24.1m to €222.2m. It said the South African economy was picking up leading to an increase in advertising revenues, while the launch of new papers and magazines contributed to the earnings increase. Operating profits at the Independent’s British operations, which include Northern Ireland, climbed by €1.5m to €15.1m. Revenues were 3.6% higher at €209.1m.

The company said its titles outperformed the British advertising market, with its main London titles - The Independent and Independent on Sunday - gaining sales and readers. However, the papers continued to lose money and the Belfast Telegraph newspaper also recorded a dip in ad revenues during the year.

Earlier this week company also averted a strike at its London papers following a last minute pay deal with unions.

Independent’s Australia and New Zealand business, APN News & Media, recorded an €11.9m rise in profits to €179.1m on sales, up nearly 10% to €778.9m. Independent books 100% of APN’s sales and profits, though it controls just over 40% of its shares. The company says it will pay a final dividend of 7c a share, bringing the full year payout to shareholders to 10.75c.

Independent’s chief operating officer Gavin O’Reilly said the company was targeting a single digit rise in earnings this year.

According to brokers yesterday, the 2005 figures were in line with estimates, though few were expecting to raise 2006 forecasts.

Independent News & Media shares fell 2.6% to €2.60 yesterday.