The Irish Times Group posts operating profit of €2.9m

Revenues at Irish media group rose 6.4% last year but energy and newsprint cost pressures increased

The group behind The Irish Times made an operating profit of €2.9 million in 2021 before exceptional items and the repayment of Covid subsidies, down from €5.4 million in 2020.

The media group repaid €2.6 million to Revenue in respect of sums it received in 2020 through the temporary wage subsidy scheme (TWSS) and employer wages subsidy scheme (EWSS). It decided to repay the money early in 2021 after reviewing the “strong” performance for 2020 as a whole.

Both revenues and costs climbed in 2021, latest accounts for The Irish Times DAC show. Turnover rose 6.4 per cent to €107.5 million, with the directors signalling a return to “more normal trading conditions” as the impact of the pandemic subsided.

This recovery, which arrived after a “challenging start” to the year, was driven by growth of 22 per cent in digital subscriptions revenue and increases in digital and print advertising revenues across the organisation, which also owns the Irish Examiner and a number of other media assets here.

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Print circulation revenues saw a “marginal decline” of 1.2 per cent, with volume declines partially offset by price increases.

Michael Sheehan, chief financial officer of The Irish Times Group, said revenues last year were “not too far off the nearest normal of 2019″ despite the ongoing effects of Covid in the first half, with a strong final quarter for print advertising continuing into the first half of 2022.

Digital advertising had “a good 2021″, but has levelled off as 2022 has progressed, amid advertisers’ rising caution about the economic outlook.

A “continued focus” on adding new paid subscriptions delivered volume growth of 8 per cent last year, helped by the launch of the Irish Examiner’s digital subscription service in March 2021. Total subscriber numbers stood at 136,653 across the group as of the end of 2021, with the rate of growth slowing in the second half.

“We continue to look at further investment in technology to support our journalism,” Mr Sheehan said. “Cost challenges started to come through in the second half of 2021 and they have continued into 2022 with newsprint and energy prices rising, while the cost-of-living crisis has also affected consumers,” he added.

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Newsprint (printing paper) costs per tonne increased threefold between the first quarter of 2021 and the current quarter, while electricity costs have soared by a similar amount.

“These increases are unsustainable for many in the industry and that’s the challenge we’re facing,” Mr Sheehan said.

The group’s new contract with rival publisher Mediahuis to print its Irish Independent and Sunday Independent titles from January 2023 and the Government’s move to zero-rate print and digital newspapers for VAT will “provide a bit of leeway”, though challenges remain.

The board of the company, which is chaired by Dan Flinter and owned by a trust, this week announced the appointment of former deputy editor Deirdre Veldon as group managing director.

Ms Veldon succeeds Paul Mulvaney, who joined the company in December 2021, with the accounts stating his annual salary as €300,000, up from the €270,000 paid to previous managing director Liam Kavanagh.

Paul O’Neill, who recently stepped down as editor of The Irish Times, was paid €240,000 in 2021, while Mr Flinter was paid €67,000 for his non-executive role. Mr O’Neill was last month succeeded by Ruadhán Mac Cormaic.

The accounts show the cost of sales rose 8.5 per cent to €74 million in 2021, while distribution and administrative costs increased 11.5 per cent to €30.6 million, as temporary cost savings introduced in 2020 were reversed and the TWSS and EWSS payments were repaid.

Mr Sheehan said the company had met the thresholds for the schemes when they were in operation, but the improvement in trading as the advertising market recovered in late 2020 meant it was “the right thing to do” to repay the subsidies.

Significant gains in group investments recorded in 2021, as world equity markets rebounded from the impact of Covid, have been “significantly challenged” during the first half of 2022, the accounts state.

Net cash as of the end of 2021 remained “strong” at €23.7 million, compared with €24 million a year earlier.

As well as The Irish Times and Irish Examiner, the group owns Cork daily the Echo, six weekly regional titles and majority stakes in radio stations WLR and Beat 102-103. It recently agreed to sell a minority stake in Cork’s Red FM as part of the sale of the station to Today FM and Newstalk owner Bauer.

The group received a further payment during 2021 relating to its 2017 disposal of its investment in Entertainment Media Networks, recording a gain of €105,741. It wrote off a loan of €378,552 relating to Benchwarmers Limited, a sports website it agreed to sell in 2020.

Other subsidiaries owned by the company include property business MyHome.ie, training company Itronics and web publisher DigitalworX, while the group also owns a 50 per cent interest in magazine publisher Gloss Publications.

Laura Slattery

Laura Slattery

Laura Slattery is an Irish Times journalist writing about media, advertising and other business topics