The Irish Times Trust Ltd, parent company of The Irish Times Ltd, has recorded a 51.6 per cent increase in pre-tax profit from £9.3 million (€11.8 million) in 1997 to £14.1 million in 1998.

The increase was due to strong circulation growth and buoyant advertising revenue.

The Irish Times Trust Ltd is a non-trading company and has no assets apart from the £100 contribution with which it was established. However, because it has voting control, it is the parent company of The Irish Times Ltd. The assets and profits are consolidated in the accounts of the trust but they are the property of The Irish Times Ltd and its subsidiaries.

Mr Louis O'Neill, chief executive and group managing director of The Irish Times Ltd, said that, reflecting the expanding business, employment levels grew from 688 to 743, representing an 8 per cent increase.

The most important investment, costing about £2 million, was a new machine allowing insertions of pre-printed material into the newspaper: "Without that we couldn't have had two sections in the business section and the property section," he said. "That grew the business."

Profits in the first half of this year were satisfactory, said Mr O'Neill. In the absence of unforeseen circumstances, the company expects to generate a "similar level of profits for 1999".

Circulation of The Irish Times grew from 105,312 in the first half of 1997 to 111,243 in the first half of 1998 and from 110,367 in the second half of 1997 to 111,729 in the second half of 1998.

Mr O'Neill said circulation grew at a faster rate than the market and was now in excess of 112,000 but he expected future growth to be at a "more modest level". He noted that there had been no price increase since 1993, nor was one envisaged for this year.

The latest results showed a 19.7 per cent rise in turnover from £56 million to £67.1 million. Pretax profit margins improved from 16.6 per cent to 21.1 per cent.

Mr O'Neill said advertising revenue rose by 28 per cent to £43.2 million. Newspaper sales increased by 3 per cent to £19.3 million.

A breakdown of the profits shows a rise in the newspaper's trading profit from £8.7 million to £13.1 million. However, there was a rise in the losses from the subsidiary companies, from £223,000 to £304,000.

Two of the subsidiaries, ICPC and Itronics, generated a profit of £350,000 between them. Electronic Publishing incurred a loss of more than £600,000. Mr O'Neill said profits could be generated in electronic publishing in the medium to long term, but stressed this was in the development stage. With the growth of the Internet it was important for the company to be in this business.

The accounts show a further improvement in the group's strong financial position.

Financial assets (gilts) rose from £19.6 million to £30.9 million. And cash increased from £1.5 million to £2.3 million. The financial assets generated an increase in investment income from £811,450 to £1,368,187.

Investment income now accounts for 9.7 per cent of pre-tax profit. Announcing the results at a series of briefings to staff yesterday, Mr O'Neill, who is to retire shortly, said that the profits levels and financial assets were "essential to fund the wide-ranging programme of development we are committed to over the next five years or so, to maintain our pre-eminent position within the industry". The company, he added, was committed to spending up to £60 million in the next three to five years, on new plant, a new computer system and new premises for printing, "so further reserves will be needed".

Plans for a new headquarters on the former Irish Press site on Burgh Quay in Dublin have been delayed following a ruling by An Bord Pleanala on the scheme. The board laid down a number of conditions which would lead to the loss of 4,000 sq ft of space. Mr O'Neill said he hoped to get full clearance shortly. It would then take about 18 months to revamp the premises for editorial and commercial use. In response to a question from an employee, he said he was in favour of a profit-sharing scheme to be introduced in the short term rather than the long term. However, he noted he would not be around to implement such a scheme.