While it is true that Hollinger's profits have fluctuated between dollars 25m and dollars 74m in previous years, its cash flow (net profts plus non-cash reductions of income) has been steadily over Cdollars 100m for many years.
In the six months ending 30 June, leaving out all unusual gains, including the disposal of 12.5 million Telegraph shares, Hollinger had an after-tax cash flow of dollars 87m with dollars 50m of that being earned in the second quarter.
These are the best such periods in the company's history. The company's vulnerability to fluctuations in operating income in its British subsidiary is therefore much less than Ms Counsell's article indicates.
In the second quarter, the United Kingdom's contribution to that cash flow fell from more than 70 per cent in the corresponding period in 1993 to approximately 50 per cent in 1994.
It is precisely to avoid excessive vulnerability to competitive conditions in the British newspaper industry that Hollinger has successfully diversified so that henceforth most of its cash flow and income will come from non-British sources while all non-convertible debt has been eliminated and more than dollars 200m cash has accumulated.
J. A. BOULTBEE
Finance and Treasury