A strong performance in the Republic and Australia and the beginnings of a recovery in its New Zealand operations have led to a strong set of half-year results from Independent News & Media. The better-than-expected performance, which saw pre-tax profits for the half-year rise 47 per cent to #61 million (£48 million), gave an early boost to the Independent share price, which rose seven cents to #4.72 before easing back to #4.65 (£3.66). A 17 per cent increase in the half-year dividend to 4.44 cents per share has been declared.

Independent chairman, Dr Tony O'Reilly said the first half had seen strong performances from the Republic and Australia and an improvement in New Zealand. "This has produced an excellent first-half result," he said.

The market had been expecting a good set of results from Independent, with figures from Australia having already been published, but analysts were taken by surprise by the strength of the performance in the Republic where turnover was up 10 per cent to £109.9 million and operating profits more than 14 per cent higher at £26.4 million.

Analyst Mr John Clarke, of ABN-Amro, has made a sizeable increase in his full-year forecast for Independent, with the pre-tax profit forecast raised to #134 million from #124.5 million. The earnings per share forecast has been raised to 30.8 cents from 28.5 cents.

Goodbody analyst, Ms Joan Garahy said she would also be revising her earnings upwards to 30 cents per share.

Operating margins improved by one percentage point to 24 per cent, emphasising the strength of demand for advertising space and the growth in circulation of Independent's main national titles. Chief executive Mr Liam Healy said demand remained strong and, while there might be some slowdown in growth in the Irish operations, this was likely to be very small.

Independent earlier this week announced plans for a £50 million printing plant in west Dublin and talks with its production and maintenance unions on reductions in manning and new working conditions.

Analysts said they had not expected such strong growth at Independent's Irish operations ahead of the start of production at the new print plant and predicted that the lower unit costs at Citywest would undoubtedly boost Independent's domestic operating margins even further.

The Australian operations - which were largely unaffected by the Asian economic problems - reported operating profits of #25.1 million on sales of #127.3 million with strong circulation growth in the group's chain of regional titles.

The New Zealand newspaper operations - which had been badly hit by the recession in that country - bounced back in the second quarter of the year after a difficult first three months which hit turnover and operating profits. Turnover for the half year fell marginally to #104.1 million while operating profits rose by #500,000 to #20.2 million. Independent bought into New Zealand just before the economy went into recession. But with the economy heading back towards 23 per cent GNP growth and with the benefit of the heavy cost cuts still to show through, next year should see the New Zealand operations generating a strong return.

The UK remains a problem area - and not just because of the continuing losses at the London In- dependent. Overall, Independent's British operations moved from a #3.8 million operating profits to a #3 million loss. Display advertising in local and national newspapers, and also Independent's magazines in Britain suffered badly although Independent UK's managing director, Mr Brendan Hopkins said that there are signs that demand for display advertising in the second half of the year was picking up.

Circulation at the London In- dependent - of which Independent acquired full control last year - improved from 217,000 to 225,000, partly due to a £5 million investment in the newspaper's editorial side. Market share of the broadsheet market is now 9.5 per cent and the short-term target is to boost this to more than 10 per cent, which is equivalent to circulation in excess of 230,000. Mr Hopkins said the aim was still to have the London Independent titles generating a profit within the next two years.