Indo profits up 43% to €68.1m

PRE-TAX profits at Independent News and Media jumped by 43% to €68.1 million in the first six months of the year as revenue increased and the benefits of an aggressive redundancy programme kicked in.

Commenting on the results chief executive Tony O’Reilly said trading in 2004 has been very positive, with all five markets showing good revenue and profit growth.

“That positive trading position has continued into the second-half, and as such, your board remains confident of further improvements in underlying profitability for 2004, at least in line with market consensus forecasts.

“A combination of these current buoyant conditions, coupled with the benefits of the ongoing restructuring, leaves the group extremely well-placed to deliver a meaningful advance for 2005,” he said.

The cost base of the Irish group was substantially reduced with the axing of 208 jobs, one in four workers, towards the end of the first-half of 2004.

There have been further redundancies at the Independent-owned Kerryman newspaper in the first six months of this year.

Advertising sales rose 14% in the first-half while circulation revenue gained 10%.

The results were broadly in line with stockbroker expectations and the 9% lift in the interim dividend will provide a boost to shareholders.

Tony O’Reilly’s 27% stake in the company will give a dividend return of almost €6m for the first-half of the year.

Goodbody Stockbrokers analyst Niall Clifford said he is likely to raise 2005 earnings per share (EPS) by up to 5%.

“Operating margins are likely to improve further as the benefits of the 2003 restructuring programme begin to be realised over the next 18 months,” he said.

IN&M chief operating officer Gavin O’Reilly signalled potential pressure on advertising rates for the company in Ireland as sales of its tabloid version of the Irish Independent grow.

The switch to a smaller version of its British Independent title disrupted relations with advertising agencies and hurt its first-half advertising sales until the company agreed lower rates, Mr O’Reilly said.

“During the first-half of 2004 we did have some fairly intensive rate reaction from advertisers in the UK, which meant that a number of agencies actually weren’t trading with us. What we saw in the first-half was advertising down 4% to 5% on The Independent,” he said.

However, Vincent Crowley, the chief executive of the company’s Irish operations said the broadsheet and tabloid versions of the Irish Independent will continue to be published for the foreseeable future.

The group’s retained profit increased to €12.2m, up from €2m in the same period of 2003.