Wilson & Horton trumpets good news with a big jump in profit

By KARYN SCHERER

Media group Wilson & Horton Holdings has bounced back from a difficult year in 1998 to report a much-improved profit for the year ending in December.

The company, which publishes the Herald and several provincial papers and magazines, along with commercial printing operations, revealed yesterday that it had increased its sales revenue for the year by 3.3 per cent to $453 million.

One-off foreign exchange gains helped boost its bottom-line profit to $185.8 million, compared with a loss last year of $119.1 million.

However, the unrealised gain is seen as a quirk of New Zealand accounting rules and the company, now wholly owned by Dublin-based media group Independent News & Media, instead trumpeted its profits before one-off items and tax of $54.5 million.

The result is almost double last year's pre-tax operating profit of $27.7 million and follows a major restructuring last year that sliced more than $8 million out of its annual budget.

The company indicated in August that it was expecting a strong second half, due to the improving economy.

It confirmed yesterday that its advertising revenue across the group was up by 5.5 per cent. Earnings before tax and interest were up by 15 per cent over the year, and by 25 per cent in the second half. The company, nevertheless, remains cautious about the coming year.

While employment advertising in January was 65 per cent ahead of last year, it has questioned whether such rates of growth can be sustained.

It also remains cautious about real estate advertising, with the real estate market showing signs of nervousness about potential rises in interest rates this year.

Chief executive John Sanders said the company was expecting most of its growth to come from its regional newspapers this year, following significant cost reductions.

Circulations of most of its regional newspapers were stable, while the Herald had recently enjoyed a "significant upswing" in sales.

Meanwhile, the company would continue to expand its new media operations, with announcements likely next month about new investments.

It has already indicated it intends to invest in internet companies this year, as well as forming joint ventures to boost its new media profile. It has also said it will take a stake in the burgeoning market for mobile data through a new company, iTouch New Zealand, which expects to launch later this month.

Mr Sanders said the company's new media operations would continue to be a cost this year, "but not a substantial cost."

The moves towards new media have helped boost worldwide interest in media stocks and have also rubbed off on Wilson & Horton Holdings, created by Independent News & Media for the acquisition of the New Zealand media group.

The exchangeable preference shares have risen significantly over the past three months, following a doubling of the parent company's share price to 11 euro ($21.75).

The New Zealand result follows the announcement last week that the parent company's Australian subsidiary, APN News & Media, lifted its net profit to $A42.4 million - a 20 per cent increase from the previous year.

The parent company is due to announce its own result on March 29.

On maturity in 2003, shareholders can exchange one Wilson & Horton Holdings share for either $8 cash or one Independent News & Media share. Shareholders will receive the normal fully imputed dividend of 20c a share on May 31.