The Irish Times Ltd, the publisher of The Irish Times, more than doubled operating profits in 2004 to €15.3 million.

The strong growth in profits reflected an almost 10 per cent increase in turnover to €104.4 million, while operating costs rose by only €0.9 million to €89.1 million.

Maeve Donovan, managing director of The Irish Times Ltd, said the rise in turnover was due to "very strong double digit growth in advertising revenue, driven by property to a degree, but recruitment advertising came back very strongly in the second half of the year."

There was no increase in the price of the newspaper during the year. Circulation was steady, and has increased in the first half of 2005, she said.

Contract printing also contributed to growth in turnover, particularly in the second half of the year when the group began printing the Farmers Journal, said Ms Donovan.

The relatively small rise in operating costs disguised a €1.5 million increase in pension costs which was due to legislation that came into effect during the year giving pension rights to part-time and casual workers.

Overall staff costs rose from €42.65 million to €43.56 million.

Staff will this month receive a profit share payment equivalent to 4 per cent of annual salary.

The deficit in the group pension schemes rose from €27.92 million to €35.49 million.

This reflected a fall in bond yields last year, which pushed up the schemes' liabilities from €153 million to €178 million. According to finance director Liam Kavanagh the company is in line with the funding proposal agreed with the Pensions Board and is committed to a review of contribution levels with the unions within two years.

Itronics, the division that operates the Ireland.com web portal, reduced losses from €0.8 million to €0.6 million.

"As a business there are still too many costs in it and we are looking to make a significant improvement," said Mr Kavanagh.

"We have seen a turn-up in the online advertising area in the last couple of months," said Ms Donovan, who added that the company remained firmly committed to the business.

The Irish Times group generated net cash of €18.7 million and paid down €2.6 million of its debt, which stood at €0.5 million at year end. Cash on hand at year end was €20.8 million and the bulk of this will be re-invested in the business, according to Mr Kavanagh.

This year the group will invest €20 million, of which €12.5 million is committed to upgrading the printing plant at Citywest.

There has also been significant investment this year in a rebranding of The Irish Times and the launch of an international edition of the paper which is distributed in Britain and Spain.

The remainder of the €20 million will be to cover the costs of relocating the group to a new city centre office building in Tara Street and for a restructuring programme, Building on Success. Negotiations on this programme between the company and the unions are due to start this month.

Despite the group's strong performance in 2004, further restructuring was needed to build long-term competitiveness, said Ms Donovan.

The group is seeking to reduce its cost base by €4.5 million and a voluntary redundancy package will be introduced with the aim of reducing staff numbers by between 35 and 40. At the end of 2004, there were 544 staff.

"The key is to ensure the business benchmarks well in terms of peers. We must reflect changes in the market. Independent [ News & Media] have changed the game plan and that gives them an advantage. We have to meet the threat," said Ms Donovan.

Trading in the first six months of the current year has been "very strong" with both recruitment advertising and property advertising remaining buoyant, she said.