Independent News & Media said it expects earnings in 2004 to meet market forecasts, helped by the success of its new compact edition in the UK.

In a trading update, the company said revenues were comfortably ahead of last year. Advertising revenues have been buoyant in the first six months of this year, up by more than six per cent in constant currency terms.

Circulation revenues have also advanced solidly and are expected to be more than 7 per cent ahead of 2003 in constant currency terms in the first half, the company said.

Circulation has been boosted by the new compact Independent format in the UK which has led the newspaper to add 40,000 new readers and record its highest circulation market share since 1996.

The group said its Irish compact edition had also performed well.

It has exceeded targets since its February launch, delivering a net increase in sales of 10,000 copies per day.

Sir Anthony also told the annual meeting that the company's operations in Australia and New Zealand had one of their best years ever last year and were set to exceed that this year.

Meanwhile, its South African business is performing ahead of last year and will be boosted by a rising rand.

The company also said its worldwide cost-cutting plan was ahead of schedule and it was on track to deliver planned annualised savings of €18.9 million on a phased basis by the end of 2005.

Shares in Independent close two cents higher at €1.95 yesterday.