INL profit hits $37m on back of ads surge

By SIMON HENDERY media writer

Independent Newspapers Ltd's annual profit was boosted by improved advertising and circulation figures, and a reduced loss from subsidiary Sky TV.

INL yesterday reported a $37.8 million profit for the June year, compared with $26.1 million last year.

The publisher owns 66 per cent of Sky Television, which reported a $30.2 million loss for the same period, a big improvement on its $42.3 million loss a year earlier.

INL's operating revenue rose from $550 million to $874 million. It reduced its tax bill from $25.6 million to $4.1 million by utilising Sky's tax credits for the first time.

The $8.4 million cost of merging the Dominion and Evening Post into the Dominion Post was mainly responsible for a big increase in non-trading items, from $5.2 million last year to $16.5 million.

The managing director of publishing, Rick Neville, said advertising volume rose 1.4 per cent, led by a 6 per cent increase in national campaign items as advertisers took advantage of the booming rural economy by placing more ads in the group's regional papers.

Classified advertising fell 1.6 per cent, mainly because of a drop in IT employment ads in Wellington.

Average net paid sales across INL's metropolitan and regional dailies, its weeklies and Australian newspapers rose 0.9 per cent to 758,000. That was below the 1999-2000 year figure of 769,000.

Losses for INL's Stuff website halved from $3.5 million to $1.6 million. Neville said it had record revenue last month.

Sky's annual revenue rose 15 per cent to $345 million. The company has 503,000 subscribers for its digital and UHF service, up 17 per cent over the year.

Sky chief executive John Fellet said advertising revenue was up 31 per cent to $16.5 million mainly as a result of viewership-monitoring "people meters" catching up with the network's growth, allowing it to charge advertisers more.

Total revenue was $345 million, up from $300 million.

Investors have been happy to watch as the 11-year-old Sky chalked up huge losses while building up subscribers. It is now in 36.6 per cent of homes and has a virtual monopoly of the pay-TV market.

The company expects to break even in the second half of next year.

INL will pay a 4.5c per share final dividend, unchanged from last year.

The company's bottom line result was below market expectations of a $46 million profit and the company's share price fell 10c, or 2.9 per cent, yesterday to $3.35.

Sky's share price was unchanged at $3.80.

INL is 44 per cent owned by Rupert Murdoch's News Corp.