INL shares hit two-year high

By KARYN SCHERER

Shares in media group Independent Newspapers (INL) continued to climb yesterday, despite confirmation from the company that its investment in pay-television operator Sky TV had dented its interim profit.

The Wellington-based company revealed a widely expected 11 per cent drop in its bottom-line profit for the six months to the end of December, to $23.8 million.

Nevertheless, its shares rose 15c to close at a two-year high of $9.30 on the back of good news about its newspaper operations, which recovered strongly in the six months to the end of December.

The newspaper industry is experiencing a strong recovery in advertising volumes after a difficult 1998.

INL said advertising across its New Zealand newspapers was up by 4.5 per cent during the period, with display advertising up 15 per cent and classified advertising up 8 per cent, compared to the same period a year earlier.

The company is buoyant about the trend continuing in the second half of the year.

Meanwhile, it has also announced a 2-for-1 share split, effective from March 17.

It will pay a dividend on all shares of 7c apiece - an effective dividend of 14 cents compared with 12c a share a year ago.

Kevin Bennett, an analyst with Deutsche Securities, said investors would be heartened by the slightly higher dividend payment, which will be paid before a higher tax rate on earnings over $60,000 comes into effect after March 31.

However, some analysts remain concerned about a delay in the company's internet plans.

INL had originally hoped to launch a site at the end of last year, but it has now been delayed until May.

"They seem to be making pretty slow progress," said John Norling, equities manager with Axa New Zealand.

INL's managing director, Mike Robson, described the launch as a "complicated exercise," but would not give any further details.

"We are attempting something fairly spectacular."