Independent News and Media has reported a 99 per cent slump in profits at its UK division, which publishes the Independent titles and the Belfast Telegraph.
Announcing its 2008 end-of-year results this morning, the company said operating profits in the UK fell from â‚¬15.5m to â‚¬200,000 – a 98.7 per cent drop.
Revenues at the UK division were down 19.8 per cent from â‚¬268.1m to â‚¬215m.
INM announced a major restructuring programme at the end of last year, with the Independent titles moving in to the Daily Mail offices in west London and sharing facilities, production and picture services.
The company estimates that the sharing agreement will save about £10m a year.
In its results, INM reported a group pre-tax loss of â‚¬161.4m after writing down the value of its newspaper assets “as a consequence of the current economic downturn”.
And it warned that it “does not have sufficient financial headroom available under its existing facilities in order to meet this maturity and service its debt obligations”.
The company said there was a “strong likelihood” that it would breach its lending agreements during 2009. It has a â‚¬200m bond that is due to repay, with interest, on 18 May.
Group prevenues fell 11.8 per cent from â‚¬1.67bn to â‚¬1.48bn – a 2.6 per cent drop if the effects of fluctuating foreign exchange rates are ignored.
INM said the tough conditions had continued into 2009. Group advertising revenues in the first four months of the year were down by 18.4 per cent.
This month, Gavin O’Reilly succeeds his father, Sir Anthony, as Independent News and Media chief executive.