Buoyant Mirror set to expand

Mirror Group yesterday vowed to expand further in media businesses, including newspapers and television, as it reported interim pre-tax profits, before exceptional costs, of pounds 39m and improved cash flow.

David Montgomery, chief executive, said: "Mirror Group has outperformed other newspaper companies in absorbing a 35 per cent increase in newsprint costs. The quality of these results confirms Mirror Group as an efficiently run media business capable of further expansion."

He expressed regret that the group had failed to win the recent bidding war for Westminster Press, the regional newspaper group, but said he would look at other newspaper acquisitions "as and when they become available".

The Westminster Press bid had been mounted in league with Independent Newspapers, Dr Tony O'Reilly's media group, and Mr Montgomery said the two companies could work together in the future.

Independent Newspapers and Mirror Group each controls 46 per cent of Newspaper Publishing, which owns the Independent and the Independent on Sunday.

Mirror Group newspapers, led by the Daily Mirror and the Sunday Mirror, reported operating profits of pounds 55.2m in the first six months of 1996, with margins roughly stable at 20 per cent. "That puts us at the top end of the market," Mr Montgomery said.

Shareholders will receive a 12.5 per cent increase in the interim dividend to 1.35p. Mirror Group's shares closed 6.5p higher at 207p yesterday.

Live TV, the group's cable television channel, was ahead of budget, Mr Montgomery said, and would be at break even by 1999. He added that independent consultants had put a value of pounds 50m-pounds 90m on the channel, and that the stock market was underestimating the power of the Live TV brand.