Irish
Irish media groups' 2005 results boosted by continuing property boom; Ireland.com had losses of €250,000
By Finfacts Team
Oct 27, 2006, 09:19

Advertising agency spend in the principal national newspapers increased by over 10% in the first quarter of 2006 continuing a pattern established in 2005, according to the industry group NNI. Irish Times advertising revenue in 2005, increased by 9.5% and its weekly Property supplement, which is published with the Thursday edition, is still up to 60 pages with about 50 pages of advertising.

Irish Times Ltd  reports a profit before tax of €14.1 million for 2005, after taking a restructuring charge of €5 million. Operating profits TCH increased to a record €11.27 million for 2005.

TCH’s annual accounts, show record results for the 53 weeks ended 1 January 2006 with total sales increasing by 11% to €93.5m from €84.2m in 2004.

Irish Times Ltd  operating profits before the restructuring charge is taken into account were €18.1 million, in line with the €18.3 million reported in 2004. Pretax profits in 2004 were €19 million.

The €5 million charge related primarily to a redundancy programme which will be completed this year and should cut recurring overheads by €4.5 million.

Turnover in 2005 was €113 million, an increase of 8.5 per cent on 2004. Circulation of The Irish Times rose 2 per cent to 117,456 copies per day.

Costs rose by 9.5 per cent to just over €94 million, with much of the increase attributed to an 8.2 per cent rise in employment costs and higher newsprint prices. Deputy managing director Liam Kavanagh said the higher employment costs were due to a number of factors, including rising pension costs, implementing the national wage agreement and taking on additional staff. It also included a staff profit share.

Kavanagh said staff numbers are due to fall this year under a voluntary severance scheme that is part of the restructuring programme. The company is on target to shed between 35 and 40 jobs and cut overheads by €4.5 million, he said.

The accounts show that the Irish Times Ltd's share of the losses incurred by Fortunegreen were €103,000. Fortunegreen is a joint venture with Metro International and Associated Newspapers. The Irish Times Ltd is a 45 per cent shareholder in the company, which publishes the Metro freesheet distributed to commuters in the Dublin area.

"We have just finished the first year of the three-year plan for Metro and are reasonably satisfied with the way things are going," said Kavanagh. "It is establishing itself firmly on people's advertising schedules and should break even within 12 months."

Itronics Ltd, the wholly owned subsidiary which operates the Ireland.com website and a number of other businesses, lost €250,000 last year. "With the acquisition of MyHome.ie and the increasing use of broadband, we expect to see significant developments in the internet arena. Ireland.com is well set to capitalise on that," Kavanagh said. The Irish Times Ltd agreed to buy online property site MyHome.ie for €50 million in July.

Commenting on 2006, Kavanagh said the immediate outlook was still positive, with advertising remaining strong, particularly in the key areas of recruitment and property.

TCH’s operating profit, before interest and taxation, for the year was €11.27m, an 11% increase on the 2004 figure of €10.13m.

When exceptional items, profits from the sale of assets and redundancy and reorganisation costs, are taken into account the pre-tax profits were €12.29m.

TCH profits were €45.27m in 2004 as a result of an exceptional once-off gain of €36.6m arising from the sell-off of the Irish Examiner and Evening Echo’s Academy Street offices in Cork city centre.

The two newspapers will move nearby to new purpose built offices at City Quarter, Lapps Quay, later this month.

The accounts show that dividends paid to the Crosbie-owned family trusts which own TCH increased to €7m, from €5.1m in 2004. Directors’ remuneration jumped to €2.66m in 2005 from €892,000 in 2004.

Confirming the company’s commitment to continued expansion group managing director, Anthony Dinan, said the healthy results across the group’s portfolio of businesses means that TCH is well placed to continue on its acquisitive path.

“The newspaper market is changing rapidly and TCH is one of the stronger groups emerging from the consolidation.

“We are committed to expansion through organic growth and acquisition and our strong financial position ensures that we will compete for any suitable media assets coming on to the market,” Dinan said that the outlook for 2006 is very positive also.

TCH chairman, Alan Crosbie, expressed his delight at the results and said: “The outcome was a tribute to all the group management and staff.”

The accounts also show the company’s investments held by AIB and Bank of Ireland investment managers increased to €12.65m in 2005 from €10.6m in 2004. Overall retained profits at TCH rose to €77.55m from €74.47 in 2004.

Thomas Crosbie Holdings Limited comprises 18 newspapers; the Irish Examiner, the Evening Echo, the Waterford News & Star, the Western People, the Sligo Weekender, The Kingdom, the Newry Democrat, the Down Democrat, the Nationalist and Leinster Times, the Kildare Nationalist, the Laois Nationalist, The Sunday Business Post, Roscommon Herald, Enniscorthy Echo, New Ross Echo, Gorey Echo, Wexford Echo and The Irish Post.

TCH also has an electronic media division Thomas Crosbie Media which comprises Motornet.ie, Breaking News.ie, Golfonline.ie, Rugby.ie and RecruitIreland.com. TCH did not provide a divisional performance breakdown. The group also has 36% shareholding in RedFm in Cork and 15% in Mid West radio in Mayo.