Independent Newspapers plans for profit

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INDEPENDENT NEWSPAPERS, the Ireland-based international newspaper group, yesterday announced sweeping restructuring plans designed to deliver cost savings of more than IRpounds 90m over five years.

The group, which owns the Independent and Independent on Sunday titles in Britain, said the restructuring would take advantage of the latest information and production technologies, as well as modern, more streamlined methods of producing quality newspapers.

Liam Healy, chief executive, said the programme would result in some reduction in the headcount but he declined to be drawn on which areas of the group would be most affected.

The job losses are not expected to impact on the UK, where the major restructuring initiatives have already taken place following the successful integration of the Independent titles into the group's other UK businesses. After suitable consultation with unions, the group plans to bring working practices up to global best practice standards throughout its operations.

Independent Newspapers is making a provision of IRpounds 38.5m against its 1998 profits to cover the restructuring. This will be offset by the substantial capital gain the group made on the recent disposal of its French outdoor advertising business, Sirocco, so the exceptional charge will not affect earnings for the year.

Mr Healy said the programme would begin immediately and would therefore have an instant, positive effect on earnings. He anticipated the restructuring would allow the company to persist with its record of double-digit earnings growth next year, despite the world economic slowdown.

"It was felt appropriate that a number of local national initiatives designed to improve productivity and profits should be brought together and handled as one programme," Mr Healy said. "You look much more closely at all your activities in a downturn," he added.

Independent Newspapers brought in Booz Allen & Hamilton, the international consulting firm, to put the finishing touches to the plans.

There are five main elements to the restructuring: modernising production operations; moving to more efficient working practices; streamlining advertising, circulation and distribution activities; consolidating administrative support, and improving sharing of editorial resources across the group's newspaper interests in Ireland, Britain, New Zealand, South Africa and Australia. In Ireland, the group is finalising plans to build a new state- of-the-art printing facility, which is expected to be operational within the next two years.

Shares in Independent Newspapers added Ir20p to close at 240p on the announcement.