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Pay TV weighs down INL

By Phil Boeyen, ShareChat Business News Editor

Thursday 6th September 2001

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Media company Independent Newspapers (NZSE: INL) has suffered a 25% drop in full-year profit as it counts the cost of its Sky TV (NZSE: SKY) investment and a lacklustre advertising market.

INL has reported tax-paid profit of $26.11 million for the year to June, down 24.6% from the previous year's $34.64 million. Sales revenue rose to $549.83 million compared to last year's $522.87 million.

During the period the company lifted its holding in Sky TV from 47% to 66% and its accounts reflect 11 months of associated earnings from Sky and one month of the business as a subsidiary.

Sky today reported a full-year loss of $42.34 million, 57% higher than last year's $26.97 million loss due to higher depreciation and increased programming costs.

INL says its New Zealand publishing operations generally traded well during the year, with growth coming from its classified advertising, especially situations vacant.

In newspapers such as The Press in Christchurch the company has revamped its employment advertising into a 'Careers' section, no doubt keen to offset the huge drop in real estate advertising it has suffered in the past few years.

INL reports retail advertising volumes were steady although national agency business declined.

Across the ditch the company's Victorian publications have been hard-hit by the economic downturn although the largest division, The Geelong Advertiser, showed positive signs of recovery by year's end.

Despite the popularity of its internet business, stuff.co.nz, and the related jobstuff website, INL says the venture has been a significant expense. At the end of last year a decision was made to reduce internet expenditure by more than half.

Group debt increased significantly during the year to $740.8 million, reflecting consolidation of Sky's debt and the cost of the acquisition.

A final dividend of 4.5 cents per share has been recorded, bringing the full-year payout to 8.5 cents.

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