Independent Newspapers drops out of running for Fairfax

Independent Newspapers, the Irish-based media group, yesterday ruled itself out of the running for Fairfax, the Australian newspaper empire, the future ownership of which has been put in doubt by Kerry Packer's recent announcement that he was selling down his stake in the company.

Independent Newspapers, chaired by Dr Tony O'Reilly, has been linked with attempts to purchase Fairfax in the past, but this time round it says it will not be pursuing possible openings.

Announcing record profits for the first six months of this year, Liam Healy, chief executive of Independent Newspapers, said: "The price is too high for a mature newspaper group and we would not be interested."

In the half year to the end of June, Independent Newspapers increased its pre-tax profits from IRpounds 25.6m to IRpounds 39m, thanks mainly to a first- time contribution from the group's recently acquired newspaper interests in New Zealand, Wilson & Horton.

However, there was strong growth throughout the group, and according to some forecasts in the City, where the group has attracted a significant investment following, profits may top IRpounds 100m for the year as a whole.

Dr O'Reilly said: "The results for the group for the full year are expected to show a worthwhile improvement over 1996."

In Ireland, where the company owns the country's leading quality daily and Sunday newspapers, there were strong gains both in advertising and circulation revenues. Both titles were able to consolidate and build on their leading positions.

In the UK, progress was made in reducing losses at The Independent, which is 46 per cent owned by Independent Newspapers, despite the continued price war in the broadsheet market. The company's share of losses fell from IRpounds 2.9m to IRpounds 2.6m.

In local currency terms, there was strong growth in profits from the group's interests both in France and South Africa. However, the steep decline in the value of the French franc and the South African rand led to a slight reduction in profits from these territories when translated back into the Irish currency.

The board is recommending an interim dividend of 2.6p, an increase of 13 per cent on last year.