‘Star’ profits slump by 60%

The owner of the Irish Daily Star newspaper saw a 60% drop in profits in 2011, mainly arising from the closure of its Sunday title, with the company also lurching from a net cash to a net debt position by the end of the year.

Accounts filed with the Companies Registration Office for Independent Star Ltd show a fall in full-year operating profit (before tax) from almost €4.3m to just under €1.7m. Total profit for the year came to nearly €1.44m, down from a near €3.9m total at the end of the previous year.

However, prior to €2.32m worth of exceptional costs — relating to the redundancy, contractual, and other costs arising from the decision to close the Irish Daily Star Sunday — operating profits amounted to just over €4m, down from €4.3m in 2010.

The accounts show that the company — a joint venture between Independent News & Media and British publisher Northern & Shell — slipped from a net cash position of €636,699 at the end of 2010 to a net debt of €801,347 as of the close of last year.

Employment costs — covering all staff, including executive directors — were lowered from nearly €10.7m in 2010 to just over €9.2m as of the end of last year. Combined salary levels at the company fell from €9.14m to €7.9m.

The company is in the midst of an internal investigation into the Star’s publication of photographs of Kate Middleton sunbathing topless.

The editor, Michael O’Kane, has been suspended and Northern & Shell owner Richard Desmond has threatened to close to close the title. However, the immediate future of the paper is thought to be safe.

In the joint venture’s latest accounts, its directors said they were satisfied with the 2011 results, adding that they were expecting trading conditions, in 2012, to “continue to be challenging”.