Independent News & Media maintains operating profits

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The Independent Online

Independent News & Media, the publisher of The Independent and The Independent on Sunday, reported maintained operating profits for 2001 yesterday despite a difficult advertising market. The group also said it was "cautiously optimistic" about the outlook.

Independent News & Media, which controls newspapers in the UK, Ireland, South Africa and Australasia, said the advertising market was now showing "less volatility and more consistency. Circulation revenue in the first quarter of this year is up in all divisions."

"While it is still early in the year the group is cautiously optimistic that the results for 2002 will show an improvement on those achieved during the year," the company commented.

Figures for 2001 showed operating profits of €219.9m (£135m) compared with €224.1m in the previous year. This was before €90m of exceptional charges against the group's investments in new media. After these charges, pre-tax profits were down to €61.8m compared with €155.3m in 2000.

UK profits grew 41 per cent to £10.6m helped by strong performances from The Belfast Telegraph and Sunday Life in Northern Ireland.

The Independent and The Independent on Sunday made good progress despite a highly competitive market and difficult advertising market conditions, the group said. The Independent grew its circulation year-on-year while the new format, introduced last week, had been warmly received, the company added. The group is to back the new design with a national poster campaign.

Brendan Hopkins, Independent News & Media's UK chief executive, said the group was committed to the titles despite a small loss in the past year. "We are very pleased with the continued progress of the UK group, in particular the Independent titles," he said. "We are very happy with our current portfolio of assets and see no divestments in the future."

Elsewhere in the group the operations in Ireland increased profits by 11 per cent to €73.2m as the move to new production facilities bore fruit. Sales of the Irish Independent reached a 19-year high of 170,055. Margins in the Irish division rose to 19.7 per cent.

The South African division also did well despite the depreciation of the rand.

In Australia, Independent News & Media has strengthened its position via the deal that saw APN buy Independent's wholly owned New Zealand business Wilson & Horton. The deal cut group debt and led to speculation that the group might make further acquisitions in the region. The key target was thought to be the Fairfax Group, though there have been no new developments.

Commenting on the group's 2001 results, Sir Anthony O'Reilly, the executive chairman, said: "In spite of the unusual difficulties of 2001, I am pleased to report that our group performed extremely well throughout the world. Our well diversified portfolio of strong brands and leading market positions have enabled the group to increase its market share during the year and a continued focus on cost economies across every division of the group has resulted in a reduced cost base exiting 2001."

The shares closed down 1.5p at 125p yesterday.