Annual pre tax profit rises 51.5% to £5.4m at Irish Times Trust

THE Irish Times Trust Limited has recorded a 51.5 per cent rise in profit before tax from £3,605,747 in 1995 to £5,464,011 in 1996. The growth is attributed to a sharp rise in profits from the core newspaper business, The Irish Times.

There was a contraction in investment income from £729,799 to £552,325. However, the underlying trend was slightly up, as the 1995 figure included a once off dividend of around £200,000 from the Press Association.

The buoyant trading conditions, with higher newspaper sales and circulation and larger advertising revenue, has continued into the first half of this year, Mr Louis O'Neill, chief executive and group managing director, told employees at a series of briefings on the results yesterday. The expectations are that this trend will continue for the remainder of the year.

Sales grew by 13.6 per cent from £42.7 million in 1995 to £48.5 million in 1996. Reflecting increased circulation, newspaper sales rose by almost 6 per cent from £16.8 million to £17.8 million. Mr O'Neill noted that this was achieved without any price increase, adding that this (1997) is the fifth year without a price increase. No price increase is anticipated for this year.

Reflecting the buoyant economic conditions, advertising was very buoyant. Revenue from advertising grew by 18.9 per cent from £23.3 million to £27.7 million.

The growth in costs lagged the growth in sales. The cost of sales went up by 9.6 per cent from £28.2 million to £30.9 million. Operating expenses rose by 9.7 per cent from £11.6 million to £12.7 million. This was achieved, despite a substantial rise in newsprint costs in the first half, said Mr O'Neill. The prices softened in the second half.

Reflecting the growth in group sales and a control of costs, the operating profit margin improved from 6.9 per cent to 10.2 per cent. The pretax profit margins widened from 8.4 per cent to 11.3 per cent.

The strong cash flow generated during the year was more than sufficient to pay for the old Irish Press building at Burgh Quay, Dublin a cash flow statement shows that £3.9 million was paid on tangible fixed assets - and other capital investments.

The Irish Times Trust has enhanced its already strong financial position. Net cash and financial assets have increased from £9.9 million to £12 million. Most of this, £11.4 million, is held in government gilts.

Mr O'Neill said the group needs to build up reserves to pay for future printing facilities, noting that, as a trust, it does not have shareholders to call upon.

The group is now investing in inserting equipment which will enhance the printing facilities.

There are a number of options for the Irish Press building at Burgh Quay, he said. The "options are being studied" but the building could be used for a new printing facility or be developed as an office block to house employees.

Asked about the possibility of introducing a Sunday newspaper, Mr O'Neill said the plans remain on hold. The group, he added, would have to be sure that such a project was financially viable.