Profits at Independent News & Media rise 23 per cent

Strong advertising and circulation growth, combined with cost-cutting measures, saw operating profit at the newspaper group Independent News & Media rise 23 per cent last year.

Strong advertising and circulation growth, combined with cost-cutting measures, saw operating profit at the newspaper group Independent News & Media rise 23 per cent last year.

The company, which publishes The Independent, said it benefited from owning papers in strong economies. INM operates primarily in Australia, Ireland, New Zealand, South Africa and the UK. All regions generated double-digit profit growth, propelling group operating profits up €53.1m (£37m) to €285.7m, a record for the company. Turnover rose 14 per cent to €1.6bn.

Sir Anthony O'Reilly, the chief executive, said: "Following record results in 2004, trading in 2005 has continued the same positive trend with all operations showing strong revenue and profit growth in some of the world's fastest-growing economies."

Ivan Fallon, the chief executive of INM's UK business, said that, financially, The Independent had a "very tough" first half as a result of advertisers' resistance to pay the same ad rates for the compact version of the paper - the smaller format was launched in 2003 alongside the broadsheet. The paper went totally compact last May. The disagreement with advertisers meant that while circulation revenues were up 17 per cent last year, as the compact title drew in new readers, ad revenues were down 2 per cent for the year following a bigger first-half fall. Mr Fallon said the "stand-off" with advertisers had been resolved. "This year advertising is blazing ahead. It is up 20 per cent."

The Independent and The Independent on Sunday titles made a loss of about £10m last year, slightly bigger than the loss in 2003.

Losses will be substantially reduced this year, Mr Fallon said, "getting on for half" the 2004 loss. He said 2006 should see The Independent get to break-even but not for the year as a whole. "We should get to the point of break-even, make that breakthrough," he said.

Mr Fallon was dismissive of press reports claiming INM was seeking to sell a stake in The Independent titles. He said last year's auction of The Daily Telegraph had generated much interest in UK newspapers, and as a result INM had been contacted by trade and private equity groups. "We have done a lot of the heavy lifting now. The last thing we want to do is give it away at this point," he said.