Independent group profits up - but not in UK

Independent News & Media posted increased profits with improved circulation and advertising revenues in its first half results today – but its UK operation saw profits and revenues fall.

INM’s UK division, which publishes The Independent, Independent on Sunday and Belfast Telegraph, posted operating profits of £4.7m for the period ending 30 June, down from £7.3m in the first half of 2007, with the company blaming ‘challenging trading conditions and poor consumer sentiment”.

UK revenues were down 14.1 per cent to £115.6m – though this was only a 1.3 per cent drop on an underlying, constant currency basis.

The company said it’s ‘on-going focus on efficiencies’had reduced costs and that further savings would be made from ‘greater use of synergies, technology, outsourcing and new streamlined work processes”.

The Independent, which goes to full-colour printing in September, appointed former Observer editor Roger Alton as editor in June and made long-standing editor Simon Kelner managing editor.

Across the group, INM posted revenues of £622.6m in the six months to 30 June – down 3.7 per cent year-on-year – though this was a three per cent rise in underlying terms.

Operating profit before exceptional items was down 0.5 per cent on the first half of 2007 at £122.6m, though this was a 2.1 per cent increase in underlying terms.

But Operating profit excluding exceptional items increased 6.1 per cent – 8.9 per cent in underlying terms – to £107.9m.

INM, which has 200 newspapers in 22 countries with a combined circulation of 33 million, claimed in a management statement that advertising revenue across the group had risen 2.8 per cent, including its recent acquisitions.

Its publishing businesses suffered a combined loss of £31.9m or 0.9 per cent in advertising revenues though online, revenues increased 23.3 per cent overall.

Group costs rose 1.4 per cent in the six months to July – but that figure was offset by savings in headcount and newsprint cover price increases. INM spent a total of £10.4m on redundancy payments for 189 staff, 143 of which had left by 30 June.

The company said it was ‘committed to continuously assessing and streamlining workflows’in the weak economic climate.

Chief executive Sir Anthony O’Reilly said the group’s structure provided ‘resilience’against a global spending downturn.

‘The current economic presents a challenge to all media companies throughout the world. It also presents opportunities, not least the potential for joint ventures, shared investments, mergers and divestments which may change perceptions of the structure and nature of media,’he said.

O’Reilly said it was difficult to predict the outlook for the second half of 2008 but said that ‘assuming a continuation of first-half advertising trends, INM believes that it will achieve profits in line with consensus forecasts for the full year”.

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