INL continues to trade well

Press, 15 July 1982, Page 20

INL continues to trade well

PA Wellington Trading for the first two months of the current year for Independent Newspapers, Ltd, has continued to the satisfactory level prevailing in the latter part of the March 1982 year, the chairman (Mr F. H. Kember) says in the annual report But he says the directors have some doubts that the present high level of activity will -continue for the full year ahead. Sales at $7B million increased by $l4 million or 22 per cent over the previous year. They included an increase of -6 per cent in advertising volumes, a significant percentage in an arOa which is so important to profitability. Circulation revenue was up by 17 per cent, mainly from higher cover charges. Other revenue, of which printing is the major item, increased by 33 per cent. Costs on the other hand rose by $ll million, of which the main items were wages and salaries up by $5.3 million to $3O million (up 21 per cent), newsprint and

materials up $2 4 million at (17 per cent) and distribution costs up $1 million to $5.3 million (23 per cent). Total cost increases exceed operating profits by $3.2 million. Mr Kember says this once again illustrated the absolute necessity to make a full recovery of increasing costs immediately they occur. “The burden to advertisers. readers and users of the group's products. IS .unavoidable," he says. Operating profit before extraordinary items at $4,594,000 was an improvement of 68 per cent on the previous year. This was a record for the company and, being a return of 16.3 per cent on year-end shareholders’ funds, restored ' profitability to an acceptable level. Mr Kember said that it is perhaps appropriate that this coincided with the 75th anniversary of the Wellington Publishing Company formed to publish the “Dominion." the first issue of which appeared on September 26, 1907. The Wellington Publishing Company was the im-

mediate antecedent of the INL group. Mr Kember says that all individual trading divisions performed well, mostly in line with budgets. He says special mention must be made of Wellington Newspapers. Ltd. which produced a result exceeding both last year and budget by a substantial margin. Income from the 24.4 per cent investment in Autocrat Sanyo Holdings (N.Z.), Ltd, has been included only to the extent of dividends received. Mr Kember say's that absence of influence in distribution policy of profits through lack of director representation, precluded a decision on equity accounting this investment. ■ The policy of disposing of properties surplus to operating use continued with sales of commercial properties in Hamilton and Upper Hutt. This still leaves major properties for sale. Trading profit of $4,594,000 covers the 18 per cent dividend 2.7 times. Mr Kember says this is a cover more appropriate to times of high inflation.