Independent posts rising profits and revenues

Independent News & Media, the international media company which owns The Independent and The Independent on Sunday, yesterday delivered its most buoyant set of figures in years.

Helped by a fast improving situation at its British national newspaper titles, the company was also notably upbeat in its comments on the outlook.

Pre-tax profits in the half year to the end of June were up by a half to €78.8m (£53.8m) on sales 14 per cent higher at €736.9m. The figures were exceptional in that, for the first time, the company was able to report a rise in both profits and revenues in all five of its geographical areas.

Sir Anthony O'Reilly, the chief executive, said the positive trading position had continued into the second half. "Your board remains confident of further improvements in underlying profitability for 2004, at least in line with market consensus forecasts," he said.

Looking further ahead, he said that "a combination of these current buoyant conditions, coupled with the benefits of the ongoing restructuring, leaves the group extremely well placed to deliver a meaningful advance for 2005".

Buoyed by the successful switch at The Independent from broadsheet to compact format, the group reported a record operating profit of £5m for its UK operations - up 42 per cent on a like-for-like basis.

Initial difficulties in persuading advertisers to pay higher rates to reflect the dramatic circulation leap achieved by The Independent since the launch of its compact edition mean that the company has had to set back its target for break-even for the two titles by six months to the middle of 2006.

However, those issues have now been resolved in a manner satisfactory to the company, and advertising revenue from The Independent is expected to be on an improving trend from here on in.

Ivan Fallon, the chief executive of Independent News & Media (UK), said the company was recasting the way advertising is sold at The Independent to take account of the transformation in its circulation fortunes. "The success of the past year in combination with the closing of the circulation gap with The Guardian has completely changed the commercial dynamics of the paper," he said.

The star feature in the group's array of newspaper and media interests was South Africa, where operating profits rose 31 per cent to a record 101.7m rand (£8.7m).

Mr Fallon said that although there were no immediate acquisitions planned, with debt now below €1bn and key ratios restored to former levels the company now again had the balance sheet strength for takeovers should the right opportunities occur.

The interim dividend is being increased by 9.1 per cent to 3 cents.