INL reports 40pc dip in profits for year

By Karyn Scherer

Media company Independent Newspapers Ltd surprised investors yesterday with a worse-than-expected profit for the year ending in June.

The Wellington-based company, which is the major rival of printer and publisher Wilson & Horton Holdings, had been expected to report a result slightly lower than last year's bottom-line profit of $50 million.

A worse-than-expected performance from the Australian arm of its magazine distribution business, Gordon & Gotch, has instead seen it reveal an after-tax profit of $30.2 million, two weeks later than originally planned.

INL announced the sale of the Australian business in June, but it admitted yesterday it was still negotiating a price with Australia's second-largest publisher, PMP Communications.

Managing director Mike Robson blamed foreign exchange losses which were not picked up early enough.

"Normally our reporting systems pick that up and we adjust but in this case, through a series of misadventures, that didn't happen and we got caught at the end of the year with it."

Mr Robson said the company hoped to conclude the sale within the next couple of weeks.

"We're still discussing it with [PMP] at the moment, and obviously this result has not helped those discussions a hell of a lot."

Mr Robson said the company was pleased with the rest of its operations, including its newspaper and magazine businesses, which had picked up in the second half of the year. The improvement had continued into the new financial year.

"We're pretty comfortable with the publishing bit. If [Gordon & Gotch] hadn't kicked us in the backside on the way past we'd have been pretty pleased."

Profits from its stake in Sky TV, which has since increased, contributed $1.8 million to its bottom line, up from $1.5 million last year.

The company has maintained a final dividend of 12c a share, bringing the total for the year to 24c a share - up from 23c last year.

INL shares closed last night down 15c to 730c - well down from February's high of 870c, but above the 680c level of May.