IN&M forecasts earnings to grow by 10%

Independent News & Media (IN&M) expects earnings to rise by 10 per cent this year on the back of a rise in advertising and circulation revenues, the company indicated yesterday in a trading update.

The 10 per cent rise in earnings is in line with market forecasts. The company intends to report full-year results on March 21st.

The company is forecasting its circulation revenues across its titles to grow by 5 per cent, with advertising revenues set to rise by 4 per cent. Independent said cost control continued to be rigorous and IN&M was on target to deliver an operating margin of 20 per cent for the year when the results are announced in March.

In terms of advertising in Ireland and South Africa, the strong first-half revenue performance continued in the second half, IN&M said.

In the UK, the Independent and Independent on Sunday achieved growth year-on-year, in contrast to other UK newspapers, which reported little discernible improvement. The company said that within Australasia the New Zealand economy was showing early signs of recovery, while the Australian regional newspaper division was performing strongly.

The company said its online assets were performing ahead of the newspapers in terms of advertising growth. Online was growing at double-digit numbers compared to 4 per cent for newspapers. The precise figure for online growth was not given.

IN&M now owns PropertyNews.com, a property portal in Ireland, and the Irish classified offering, Loadza.com. It also owns jobs sites like Search4 and Worksearch in New Zealand and Australia, respectively.

The company said it strove to be "the low-cost operator" in its industry in 2006, although its attempts to cut costs were frustrated by a 7 per cent rise in newsprint costs at its European operations.

IN&M said its Indian associate, Jagran Prakashan, the publisher of the Indian newspaper Dainik Jagran, had traded very well, with first-half net profits up 244.3 per cent "on the back of very strong increases in circulation and advertising revenues".

A full takeover of APN by IN&M and partners was attempted recently but talks broke down. The latest trading update sheds little light on whether the deal can be reignited, simply saying it is examining "the many opportunities in the Australian market with a view to maximising value for all INM shareholders".

The company's chief executive, Sir Anthony O'Reilly, said: "Another year of advertising growth, circulation growth, active product innovation and a low-cost ethos, have combined to ensure that INM is on target to deliver double-digit earnings growth for 2006. The group is extremely well-positioned for continuing strong growth for the future, in line with current market expectations."