Local investors firm on group's prospects

The 2000 New Zealand investors who hold cumulative exchangeable preference shares in Ireland-based Independent News & Media appear to be confident about the company's future in spite of the downturn in profit it announced this week.

In November next year the convertible shares, which are traded on the Stock Exchange, will be exchangeable for $8 cash or two INM shares.

After the profit announcement INM convertible shares were just on $4 on both the Irish and London exchanges, or the cash value of what they will be worth in 19 months. But in New Zealand they traded at $8.50.

The result for the year ended December 31 was a profit of €3.1 million ($6.2 million), substantially down from €80.8 million the year before. Both turnover (at €1.3 billion) and operating profit before exceptional items (€220 million) were almost unchanged.

The main impact on the result came from a €90.1 million write-down of the company's new media and cable investments, although that was partially offset by an exceptional gain of €32.5 million from the restructuring of its Australasian assets, including Wilson & Horton, publisher of the Herald.

The group also faced higher interest costs because of the purchase of the Belfast Telegraph Group and the costs of a new newspaper printing plant in Dublin.

Directors said the Australasian restructuring had enabled the company to significantly reduce debt levels.