Independent's UK titles may make profit after price hike

Cover price increases on Independent Newspapers' two flagship British titles could move the loss-making newspapers into profit, Merrion Stockbrokers has said.

A five pence sterling increase was implemented on the Monday to Friday editions of the daily Independent on September 23rd, taking the price to 55p from 50p. (€According to Merrion, Independent intends to follow this with a further 5p increase in 2003.

Meanwhile, a 20p increase in the price of the Independent on Sunday is believed to be imminent. "From our discussions with management, it would appear that the UK price war, which has hampered profitability at the UK Independent for several years, has come to an end," analyst Ms Niamh Brodie said in a note published yesterday.

"Taken together, we estimate that these circulation increases could add circa £5 million to £6 million sterling [€7.9-€9.5 million\] annually to the bottom line of Independent's UK national titles and move them into profitability," she added.

The move to increase cover prices at its British titles follow similar moves at a number of Independent's UK rivals.

The cost of the Daily Telegraph increased by 5p nearly two weeks ago and the Times followed suit.

In the Sunday market, the Sunday Times has already implemented a 20p increase from £1.20 to £1.40 and Independent Newspapers is expected to follow when the Observer has implemented a similar increase, Merrion says.

"It is encouraging that there appears to be a concerted move underpinning the price increases, which increases the likelihood that the mindset has indeed changed and that the price increases are permanent," Ms Brodie said.

However, Goodbody Stockbrokers noted that while the price increases were positive for the company, they reflected the "savageness of the advertising downturn" in the British market.

Meanwhile, Independent will also benefit from a 10 cent increase in the price of the daily Irish Independent to €1.40 which took effect last Monday. On the same day The Irish Times also increased its price to €1.40. NCB estimates that the latest Irish price rise will boost Independent's revenues by €1.2 million this year, rising to €5.3 million in a full-year.

The recent five cent rise in the cost of the Sunday Independent should add €804,000 in a full year, with much of the increased revenue from the price hikes flowing through to the bottom line, NCB said.