THE IRISH Times Ltd, publisher of The Irish Times, has reported a 6 per cent reduction in operating profit to €20.3 million for 2007 and warned of "difficult" trading conditions this year and a challenging outlook for 2009.
Higher employment and marketing costs contributed to the fall in profits, as did a 3.9 per cent drop in newspaper advertising revenue as the property market slowed down. Turnover rose 6 per cent to €137 million, including the first full-year contribution from the Myhome.ie property website.
Managing director Maeve Donovan said there had been an erosion of profits since the start of 2008 due to testing conditions in key sectors of the advertising market, but said the company at this point in its fiscal year was "certainly not" budgeting for a loss.
The firm was "altogether better equipped" to manage its business through the economic downturn than previously, she said. It was happy with the outcome of a €3.8 million editorial and marketing investment in the paper earlier this year. "I think the recent ABC figures would show that our performance has been better than some of our competitors . . . Certainly, we've been happy. We keep it under very close review."
She reiterated the company's commitment to its investment in online assets such as the Ireland.com and entertainment.ie websites, and in other assets such as its stake in the Metro freesheet and its interest in the Gazette group of local papers in Dublin.
"In the long term, the success of The Irish Times and the continued preservation of The Irish Times is predicated on really extending the footprint in online and on continuing the strength of its core audience through the newspaper and its associated titles in the most important sectors of the country."
On business conditions this year, she said: "Trading obviously has been difficult; particularly property revenues have fallen back steadily, further and further as the year has progressed. Obviously recruitment revenue has fallen back very significantly as well. But that said, there are some brighter areas on the advertising side. Consumer advertising has been reasonably strong throughout the year."
The firm is reviewing cost overheads in "an extremely targeted manner that focuses on issues of efficiency and productivity and full use of technology," she said. Asked whether this would lead to job cuts, she said: "It remains to be seen when we've completed our evaluation . . . heading into a very challenging 2009."
She saw potential "green shoots" in the fact that retailers continue to advertise, and cited a particularly strong level of display advertising. Ms Donovan said it was difficult to analyse the conditions that were likely to prevail next year. "Are we expecting a sudden upswing in early '09? No. I think what happens will in many ways, clearly, be driven by the Government response and by consumer confidence."
Liam Kavanagh, deputy managing director, said Myhome "performed well" last year and contributed to profits. The declining property market has had an impact on the site's performance, but the company "always knew" there was going to be a property downturn. He said Ireland.com was on track to break even within two years.
Ms Donovan added: "The manner in which you emerge from this difficult period will be marked out by your determination to continue to invest and grow, to extend the footprint of your business in the online area. Because in due course the revenue will come."
