Independent: profits up but shares down

Independent News and Media this morning reported a record 13% rise in pre-tax profits for 2000, however the shares have followed the market downwards, falling nearly 6% to close at 2.69 euros in Dublin.

The company, which prints some 12 million newspapers a week all over the world, posted profits of 155 million euros with turnover increasing by 15% to 1.34 billion.

Speaking to OnBusiness, Gavin O'Reilly, head of Independent's Irish operation, said the 60 million euro investment in the new Citywest printing plant was already helping circulation and yielding cost savings.

Elswhere in the Irish operation he said a sell-off of cable TV company Chorus, which is jointly owned with Liberty Media, was a possibilty if a buyer came along at the right price. It is understood that last year talks to sell Chorus to UK cable operator Telewest collapsed after a failure to agree a fair price.

Independent's Irish operating profits grew by 10% to 65.4 million euros. Turnover grew by 8% to 335.9 million euros, while operating profits widened to 19.5%. The company said in a statement that all of its editorial brands recorded 'impressive' growth in advertising, circulation and readership.

The Irish Independent recorded an 18 year circulation high of 168,2000, the Star achieved an all-time circulation high of 95,171 while the Sunday World also achieved a 10 year high. The Group added that the Sunday Independent and Evening Herald also consolidated their number one positions.

The group's overall profits in the UK grew in line with expectations to 12.4 million euros with revenues up by 38% to 210 million euros, helped by the acquisition of the Belfast Telegraph Group last August.

According to Independent, the Telegraph is now read by over half of all adults in the North and is more than twice the size of its nearest rival.

O'Reilly said the London Independent would be profitable this year with losses down to 2 million euros last year. On a global scale, he said Independent continued to consider further acquisitions, with expansion into Asia and India a possibility if the right possibility presented itself.

Independent's operations in Australia saw its operating profits grow by 15.5% to 70.8 million euros. Turnover increased by 18% to 325.1 million euros, while operating margins of 21.7% were achieved.

The Wilson and Horton operations in New Zealand contributed 55.3 million euros to operating profits, an increase of 11% on 1999. Operating profits in the group's South African operations grew by 6.8% to 23.7 million euros and turnover grew by 6.7% to 189.1 million euros.

During the year, the group continued to develop its online media division. Independent's worldwide sites are now achieving about 100 million page impressions a month - up almost threefold on 1999 levels.

Revenues from new media operations at 7.7 million euros now represent 0.6% of Group turnover. Losses of 10 million euros were below expectations.

Fully diluted earnings per share, before exceptional items, rose 10.5% to 16.01 cents, while a final dividend of 5 cents was being recommended by the board. This makes a total dividend for the year of 7.50 cents, an increase of 13% on the figure for 1999.

The figures were slightly behind expectations and the cautious outlook disappointed traders.

* Merrill Lynch has downgraded its intermediate-term rating on Independent News & Media to 'accumulate' from 'buy', keeping a long-term 'accumulate' on the stock.