The Irish Times Ltd, publisher of The Irish Times, has returned to profitability, reporting a pre-tax profit of €8.5 million for the year to the end of December 2003 compared to a loss of €2.8 million in 2002.
Turnover was flat at €95 million due to the soft advertising market in the first half of the year. Operating costs fell by just under €10 million, reflecting for the first time the full impact of the restructuring undertaken in 2002.
As a result of the savings, the operating loss of €3.3 million recorded in 2002 was reversed, with the company making operating profits of €7 million last year.
The bottom line was also boosted by a €1.8 million profit on the disposal of non-core business, bringing pre-tax profits to €8.5 million.
Some €675,000 of the profits will be distributed to staff through a profit-sharing scheme, with employees receiving an additional 2.4 per cent of salary, payable at the end of July.
The company has repaid €8.45 million of the €10.45 million borrowed in 2002 to fund the reorganisation of the business. Debt stood at €3.2 million at the year end, against cash-on-hand of €4.8 million.
Itronics, the subsidiary that operates the Ireland.com website, reduced its losses from €2.8 million to €800,000 and was approaching break-even on a cash basis.
The company made a €2.4 million profit on the sale of the Irish Field and €928,452 from the sale of the ITELIS database. However, there was a €1.5 million loss on the closure of the ICPC Ltd data-processing business, meaning that the net gain on all Irish Times disposals was €1.8 million.
The company "got out of businesses we didn't believe we had a business being in", according to Ms Maeve Donovan, managing director.
She said: "2003 was a very positive year for The Irish Times. We have substantially completed our well-publicised restructuring programme, consolidated our subsidiary activities and developed a new contract printing business at our plant at Citywest."
She said that the company had traded profitably in the first half of 2003, despite the depressed advertising market. Advertising had picked up in the last quarter of 2003 and continued strongly into 2004.
She warned that The Irish Times Ltd cost base and the savings achieved through the restructuring would come under pressure in the current year.
She highlighted the coming into effect of the Protection of Employees Act, which gives part-time workers the same rights as full-time employees. It will push up payroll costs by about €1 million, mostly in the form of increased pension payments. The accounts show that the company pension scheme has a deficit of €27.9 million.
Ms Donovan said The Irish Times Ltd had to put in place "the necessary processes to make sure staff numbers don't get out of control and that they relate to the output of the business".
She said the company had carried out a business process review in the first half of the year which, among other issues, had examined staffing levels.
She said it was too early to say whether the company would be seeking further staff reductions.
Average staff numbers in the paper fell from 705 to 560 during the year as a result of a voluntary redundancy scheme.
As well as paying close attention to costs, the company would look to drive turnover in its core business, the publication of The Irish Times.
"There is a lot of flux in circulation," she said, adding that the launch of a tabloid edition of the Irish Independent had been a factor in this.
"The whole market is affected by somebody spending that sort of money," she said.
Ms Donovan said the company was committed to the production of an international edition. "It has to happen and to be produced in a way that makes sense," she said.
She added that another editorial initiative, the introduction of a health supplement, had created a platform for attracting advertising from the health care sector.
The company had also started to actively look at growing the business through making acquisitions in recent months. "Good acquisitions are hard to find and are expensive," she said.
