Announcing another sharp rise in group profits, Independent Newspapers said that losses at the two titles had been reduced on a like-for-like basis despite significant investment in the newly-formatted products.
Since acquiring control of the two titles, Independent Newspapers has embarked on a revitalisation of the business, appointing new editors and senior writers to both titles.
The company said results so far from the British titles were "encouraging and in line with expectations", with both circulation and advertising revenue showing significant improvement.
In the group, a strong operational performance in all territories was marred by the chaos in world currency markets. Independent Newspapers has substantial newspaper interests in New Zealand, South Africa and Australia, all of whose currencies have been savaged over the past six months.
Despite this, the group achieved an increase in operating profits in the half year to the end of June of 12 per cent to Irpounds 55m. Profit attributable to shareholders after tax and minority interests rose 16.6 per cent to Irpounds 21.8m, helped by continued buoyancy in the group's core Irish market.
Liam Healy, the group chief executive, said he was upbeat about the group's operational performance which continues to make strong progress.
"Currencies are beyond our control," he said. "We will continue with the progress we are making in all our companies regardless of this turmoil, so that when currencies settle down, the benefits will accrue to us."
With full-year profits expected to show an improvement on 1997, the group is recommending a 15 per cent increase in the interim dividend to 3p a share.
Brendan Hopkins, the chief executive of Independent Newspapers (UK), said: "The key point about our results in the UK is that The Independent's losses are reducing and circulation is rising."
The buoyancy of the Irish economy ensured another strong performance from the group's titles in Ireland, which recorded a 14 per cent increase in operating profits to Irpounds 23m.
Advertising growth in Ireland was ahead of 1997, with the key sectors of recruitment, retail, financial and property growing exceptionally strongly.
All five Irish titles - the Sunday Independent, the Irish Independent, the Evening Herald, Sunday World and The Star - consolidated their leadership in their sectors.