Telegraph takes 'war' in stride: Sales down on last year, but daily paper stops losing readers to the cut-price 'Times'

THE TELEGRAPH, publisher of the Daily and Sunday Telegraph, yesterday showed signs that it was shrugging off the effect of the price war being waged in the national newspaper market by Rupert Murdoch's News International.

The Audit Bureau of Circulation figures for October, released yesterday, show that the Daily Telegraph has stopped losing readers to the Times following the inital impact of Mr Murdoch's decision to cut the Times's cover price from 45p to 30p. The Daily Telegraph's weekday price is 48p.

In addition, third-quarter figures from The Telegraph group showed pre-tax profits up a fifth at pounds 10.6m, though operating profits were flat.

The boost came from higher income from associated companies, in effect the earnings The Telegraph receives from its 20 per cent stake in the Australian newspaper group Fairfax. This made profits for the nine months of pounds 45.2m, nearly 50 per cent up on the same period last year.

The Telegraph also announced that it was increasing its stake in Fairfax to 25 per cent at a cost of Adollars 44.5m ( pounds 20.1m). So far this year the group has spent nearly pounds 70m pushing up its stake from the original 15 per cent it took when it joined the consortium to rescue the ailing group.

Stephen Grabiner, The Telegraph's deputy managing director, said the restructuring of Fairfax was gathering pace and he estimated that the company was about two years behind The Telegraph, which was turned round by a team led by the group's Canadian chairman, Conrad Black.

He added that Southam, the loss-making Canadian group in which The Telegraph controversially invested earlier this year, was probably two years behind Fairfax in its development. A restructuring plan is due to be put forward by a team, including executives from The Telegraph, soon.

At home, the ABC figures show that the Daily Telegraph's October sales of 1,011,000 were a significant fall from the comparable period last year but showed a rise of 2,000 compared with September. Mr Grabiner said he was extremely pleased with the figures as the September total had included a week when the Times still sold at 45p.

He attributed the Daily Telegraph's performance to strong promotion, including a special holiday offer. At the same time the Sunday Telegraph is showing good growth in a fairly buoyant Sunday market.

The group is also seeing higher advertising revenue for the first time in two years, with display and financial advertising both performing well, though recruitment advertising is still in the doldrums.

Mr Grabiner said The Telegraph had not yet decided how it would react to any imposition of VAT on newspapers in the Budget, but such a move would be detrimental to both publishers and readers.

(Graph omitted)