Independent Newspapers Holdings Limited (INHL), the South African newspaper company, 60 per cent owned by Independent Newspapers, has recorded a 19.1 per cent rise in pre-tax profit to 61.9 million rand(£8.8 million) in the six months ended June 30th, 1997. Profit margins improved from 10.6 per cent to 11.7 per cent. However, the underlying growth was lower and there was only a marginal rise in margins at the operating level. The company had the benefit of an interest credit compared with an interest charge in the first half of 1996. The profit before interest grew by a more modest 9.7 per cent.

The South African company said the growth was achieved against a background of a generally tighter trading conditions in retail and consumer markets, the major sources of advertising revenue. However, the company's increasingly strong net cash position, produced interest income of R4.0 million, which fed into pre-tax profit, and earnings per share, which grew from 75 cents to 83.90 cents. Sales rose from R492.4 million to R529.26. The interim dividend has been raised from 30 cents to 40 cents.

The group said all its three regional subsidiaries "performed well under the prevailing conditions" while the Cape showed a "very encouraging improvement" on the comparable period last year. The circulation of "most publications" was firmer, particularly from April, onwards". This, together with strong performances from the new publications, particularly Business Report and Per- sonal Finance, and a special focus on the containment of costs and maintenance of margins, led to the growth in operating profits. The company continued to pursue "aggressively" its commitment to develop niche products.

The expansion into electronic and other media remains high on its agenda. And it has already moved into radio through Kaya FM in which it has a 14.9 per cent stake. INHL said it is planning a number of new strategic initiatives including new titles, upgrading existing titles, reducing costs and widening the distribution areas.

On the future, INH said provided there is no further deterioration in the South African economy, group earnings should show a "satisfactory improvement" in the full year.