Independent News & Media upbeat on earnings and trading

Independent News & Media said it was on course to deliver a "meaningful improvement" in earnings this year, after a recapitalisation programme and an improvement in trading.

Independent News & Media said it was on course to deliver a "meaningful improvement" in earnings this year, after a recapitalisation programme and an improvement in trading.

The company, which publishes The Independent, has benefited from better advertising sales, new product launches and circulation improvements. Independent News & Media's operations are spread across Australia, Ireland, New Zealand, South Africa and the UK and in a trading update ahead of interim results, it said group revenues were "ahead of 2002". "This follows a progressive enhancement in advertising volumes and rates, with particular advertising strength in each of our southern hemisphere operations," the company said.

As well as gains in advertising sales, visibility of future advertising revenues was improving. In addition, Independent News & Media said circulation revenues were up on 2002 and "remain buoyant". It said this "reflects the impact of cover price increases on the prior year, with increases in market share being achieved".

The company, which is based in Ireland, said there was "solid progress" in a €315m (£220m) recapitalisation programme that was announced in March. A rights issue and disposals of some non-core assets have raised more than €188m. It said the interest charge would be lower this year because of lower debt levels, lower interest rates and its strong working capital management. The group has also agreed to sell some UK regional newspapers to Gannett for £60m. The deal is currently before the competition authorities.

"Assuming a mere continuation of current trading, the group's uniquely strong brands, leading market positions, geographic diversity and greatly fortified balance sheet leaves [Independent News & Media] well positioned to deliver a meaningful improvement in earnings for 2003, in line with market consensus forecasts," the company said.

Joe Burnell, an analyst at Davy Stockbrokers in Dublin, said this statement confirmed earnings growth would be in double digits this year. He is forecasting adjusted earnings of 13p per share this year, up from 11.4p last year. Mr Burnell said: "They've tidied up the finances. The market is now looking at trading and there's a reasonably good story here. Advertising is holding up across the group, with the southern hemisphere being the big driver."

At the company's annual meeting in June, it announced it had signed a €588m facility with its nine banks, giving the group financial security for the next five years.