'Ireland on Sunday' sees pretax losses rise by 76%

Ireland On Sunday newspaper has reported a 76 per cent rise in pretax losses to €23 million, the highest figure since the paper was bought by Associated Newspapers in 2001.

The latest results, which will be published shortly, cover the year to October 3rd, 2004. The paper posted turnover for this period of €12.6 million, up from €10 million in the year to the end of September 2003.

However, its costs rose very sharply in the period and pushed Associated Newspapers (Ireland) Ltd into the red.

While the cost of sales was down from €12 million to €11.3 million, administrative expenses were up 127 per cent, from €13 million to €23 million.

One of the biggest problems for the paper has been securing strong advertising revenue. However, with the print advertising market rebounding strongly, this may become easier in 2005.

The company has accumulated losses of €51 million built up on its balance sheet, up from €27.6 million in the previous period.

Despite the results, the company said yesterday it believed its business was improving and there have been suggestions it might introduce the freesheet Metro product in Dublin.

The balance sheet does show some improvements. Its asset position improved during the year, while debtors and cash were up from €3.1 million to €15.7 million. One of the factors in the poor results was a severe reduction in the value of goodwill at the business.

The ultimate parent of the paper is the Daily Mail and General Trust. According to the accounts, this company made a "non-refundable capital contribution" of €51.6 million to Associated Newspapers (Ireland). This meant that, while the company posted losses of €23 million, shareholders funds were in surplus at the end of the period by €12.4 million.

The paper's staff was down from 65 to 60, while payroll costs dropped from €4.6 million to €4.3 million. Director's emoluments, spread among four directors, amounted to €250,061, up from €236,891.

The paper has recorded major circulation gains over recent years, mainly at the expense of the Sunday Independent. However, the paper's circulation has dropped back again in the past year. By the end of 2003, the paper's circulation topped 163,493 but, by the end of last year, this had fallen to 144,172.

A significant amount of its promotional spending has gone on free CDs and books, although the cost of these is greatly reduced because they are often included originally in the Mail on Sunday or Daily Mail.

Last year, Martin Clake, the high-profile editor-in-chief of the paper, left and returned to a position within the Daily Mail group. He has been replaced by Ted Verity, another senior journalist from the Daily Mail stable.