Independent News & Media has said it expects earnings at the half-year stage to be more than 10 per cent ahead of the same period last year.

"Early results for 2006 are fully in line with expectations and we look forward to another successful year of double-digit growth," Sir Anthony O'Reilly, the group's chief executive, said.

But shares in Independent lost five cent, or 2.2 per cent, to €2.25 yesterday as some investors, who had been hoping for an upgrade to forecasts, reacted with disappointment.

The company, which will release its results for the six months to the end of June on September 19th, said group sales were expected to be ahead by more than 3 per cent year-on-year.

Within this, circulation revenue is expected to grow by more than 3 per cent on the back of both volume and price increases, while advertising revenues are up by more than 3.5 per cent.

Independent noted that online revenues continued to show good double-digit advertising growth, although they remained modest in group terms.

Despite increases in the price of European newsprint, operating costs remained under control as the group benefited from savings made in recent years. "The group expects to report continued underlying growth in operating margins in 2006 as the flow-through benefits of prior cost efficiency programmes are fully realised," it said.

Independent has outsourced many functions, including those carried out by office and printing staff, in recent years.

In addition, Independent expects to make savings in interest costs, reflecting its strengthened financial position.

In March, the company, which has operations in Australia, New Zealand, South Africa, Britain and India as well as Ireland, posted a 17 per cent rise in annual profits.