News Corp papers cracks with profits turnaround

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The Independent Online
RISING profits at the News of the World and Sunday Times, along with sharply reduced losses at the BSkyB satellite TV network, have helped Rupert Murdoch's News Corporation to achieve a dramatic turnaround.

The Australian-based global media group yesterday reported a recovery from losses of Adollars 393m ( pounds 140.8m) last time to a net profit of Adollars 502m in the year to 30 June.

The improvement is a further rehabilitation for the heavily borrowed group, which less than two years ago looked close to collapse. Since then its shares have risen sevenfold.

News International, News Corp's 92 per cent-owned UK subsidiary, lifted operating profits from pounds 65m to pounds 145m, helped by the reclassification of its satellite TV interests.

Stephen Barraclough, NI's finance director, said comparable operating profits were pounds 36m higher, mainly due to the improved performance of the two Sunday titles.

The dailies - the Sun, the Times and Today - were 'finding the going harder than the Sundays'. Overall UK newspaper profits rose 28 per cent.

In satellite television, losses of pounds 45.2m in 1991 before Sky merged with BSB compare with NI's pounds 13.3m share of losses in the merged company in 1992. Mr Barraclough said BSkyB made operating profits 'every single week' since March.

BSkyB claims it broadcast to 3.3 million homes by the end of the financial year; nearly half subscribed to pay movie services. Sky Sports, which began broadcasting live English Premier League football games this month, has more than 700,000 subscribers.

Apart from the UK improvement, News Corp attributed its recovery to strong performances by its Australian newspapers and its television and free-standing insert (FSI) business in the US. FSIs, which NI is poised to introduce in its British titles, are advertising supplements containing money- off vouchers for groceries.

However, News Corp's movie business, Twentieth Century Fox, performed 'poorly' after three films flopped. Also last time it had the benefit of the box office hit Home Alone.

News Corp's chief financial officer, David DeVoe, said the performance so far in the new financial year was ahead of 1991/92. 'On a worldwide basis we would be substantially better than last year.' But borrowings were Adollars 10bn at 30 June. The interest bill was Adollars 932m. Mr DeVoe would not give a debt target for 1992/93, but said: 'It is going to be lower.'

In Hong Kong, the South China Morning Post made record profits.

News Corp announced an unchanged final dividend of 5 cents making a total of 10 cents. NI shares rose 33p to 458p.