Closure of Irish Press "adding £5m" to Independent profits

THE closure of the Irish Press is, worth an additional £4 million to £5 million operating profits to Independent Newspapers, according to a detailed report by NCB Stockbrokers.

FNCB analyst, Mr Eamonn Hughes, has estimated that the absence of the Irish Press titles is worth an additional £1.1 million operating profit for the Irish Independent, £400,000 for the Star, £1.5 million for the Evening Herald, £1.2 million for the Sunday Independent and £300,000 for the Sunday World.

Mr Hughes described the closure of the Irish Press as "the single most important influence on profit growth". Plans for a relaunch of some of the Irish Press titles collapsed earlier this year when Independent indicated that it would provide no additional funding.

In terms of revenues, Mr Hughes estimated that the absence of the Irish Press titles is worth £12.4 million in additional sales for Independent - £10.5 million through increased circulation revenue and £1.9 million in increased advertising revenue.

NCB estimated that with the closure of the Irish Press, Independent has a 70 per cent share of the domestically produced Irish newspaper market. If the company decided to increase cover price by 5p across all its titles, this would add a further £4.3 million to profits.

NCB said, however, that the major opportunity for Independent in Ireland is to reduce the cost base of producing its titles. Reducing employment at Middle Abbey Street from the current 700 to 500-550 would translate into annualised savings of £4 million.

The broker said, however, that Independent will continue to have problems at its Princes Holdings cable TV joint venture, where the group's share of losses in 1995 is estimated at £3 million. "We believe that Independent will have to reevaluate its investment in this business," the NCB analyst said.

Outside Ireland, NCB Independent to expand into East through its APN associate that it will also continue to Fits stake in APN and Wilson & Horton in New Zealand. NCB that Independent management signalled a possible increase in stake in the Portuguese newspaper group Jornalgeste from 7.9 per cent to 20 per cent.

Overall, NCB expected pre tax profits of £52.2 million for Independent in 1995 and is forecasting £58.4 million profits in the current year.