THE Irish Times Trust Limited has recorded a marginal increase in pretax profit from £3,559,438 in 1994 to £3,605,747 in 1995. The growth is attributed to a sharp rise in investment in0 which more than made up for the contraction in profits from the core newspaper business, The Irish Times.
Operating profit, reflecting the newspaper business, fell from £3,362,504 to £2,964,401 due to a substantial increase in newsprint costs. These costs increased by more than 50 per cent over the past 15 months, said Mr Louis O'Neill, group managing director and deputy chief executive, who briefed employees on the results in a series of meetings yesterday.
There was no price increase to compensate for the higher costs, he said.
The price of the newspaper has not risen for the past three years. Mr O'Neill said he did not anticipate any price increase before the end of the year.
Group sales grew by 8.4 per cent from £39.4 million in 1994 to £42.7 million in 1995. The cost of sales grew marginally faster, at 8.5 per cent, from £26.2 million to £28.4 million. Advertising revenue was particularly buoyant, rising by 12.8 per cent to £17 million.
Newspaper sales increased by 3.2 per cent to £23 million, representing a real volume growth.
The strong trend in advertising revenue continued into the first six months of this year. Circulation of The Irish Times increased by 5.5 per cent to 98,867 in the second six months of 1995. This upward trend is continuing and the group expects to announce another circulation record for the first six months of this year, Mr O'Neill said.
Investment income increased more than two fold, from £290,560 to £729,799. Although interest rates were lower, the group benefited from a once off dividend from the Press Association and higher investment income from government gilts. The company's gilt investments rose from £6 million to £9 million.
The Irish Times Trust remains in a very strong financial position. Apart from gilts it has net cash of £524,032, up from £499,705.
Mr O'Neill said that as the group is a trust and not a public company, it cannot raise funds from its shareholders, so it is necessary for it to have funds available for investment. It purchased fixed assets for £1.68 million last year, up from £1.2 million in the previous year.
The group, he said, might have to start the planning process in about five years time, to replace the existing printing press.
The net profit, after tax, fell from £3,118,138 to £3,001,620. This boosted reserves from £13.7 million to £16.7 million. The group's net assets now amount to £17.8 million, up from £14.76 million. Unlike other newspapers groups, The Irish Times Trust does not include an estimated value of its newspaper title in its balance sheet.
The group accounts show a fall in the share of losses of associated companies, from £93,184 to £87,080. This reflects its investment in ITELIS and the Irish Times Language Institute.
Mr O'Neill said the group had come to no conclusion on the publication of a Sunday newspaper. It is a difficult decision, involving a major investment. However, he expected a decision to be made soon.
