Independent News and Media's New Zealand-based newspaper subsidiary, Wilson and Horton, reported a loss before tax of NZ$11.5 million (€5.9 million) for the six months to end June. The latest outcome compared with pre-tax profits of NZ$178 million (€88.4 million) for the previous first half, but both results were affected by exceptional items.

When the exceptional charges are stripped out the latest result was marginally weaker with profits before tax and exceptional charges of NZ$18.6 million down from NZ$18.9 million for first half of 1999.

But operating profits - before the exceptional charge of NZ$30 million and interest charges - were 24 per cent ahead at NZ$42.9 million (€21.8 million). Turnover was up 8.3 per cent to NZ$227.4 million, giving an increase in operating margins to 18.87 per cent from 16.48 per cent. In a statement, the group said that when losses from new media businesses were excluded, operating profits for the first half were 31.6 per cent ahead of the corresponding period last year.

The first half pre-tax profits outcome was adversely influenced by an increase in the group's net interest charge to NZ$24.3 million from NZ$15.7 million and the NZ$30 million exceptional charge. In the previous first half, profits were boosted by an exceptional gain of NZ$159 million. The latest exceptional charge mainly arose out of realised foreign exchange losses from the restructuring of foreign currency borrowings into local currency.

Chairman Mr John Maasland described the operating outcome as "an excellent result". Buoyant trading conditions boosted revenue with strong growth in income from advertising and commercial printing while good cost control helped to boost margins, he said.

Wilson and Horton chief executive Mr John Sanders said the results had been achieved "within a business environment which has been negatively affected through the uncertainty introduced by the Employment Relations Bill and other government initiated policy changes".

But he added that "in spite of the current market conditions, our strategy to increase market shares and continue with disciplined cost reductions positions Wilson and Horton well for the full year.

Moves in the six-month period included an entry into e-commerce online through W&H Interactive and mobile commerce initiatives through associate company iTouch New Zealand. Mr Sanders said the group had achieved an increase in circulation and an increase in its share of the advertising market with its flagship the New Zealand Herald while its regional titles had performed well.