IPC reveals pounds 27m profit slump

IPC has announced a pounds 27 million decline in profits due largely to the cumbersome debt associated with the 1998 management buyout and its investment in new businesses.

IPC has announced a pounds 27 million decline in profits due

largely to the cumbersome debt associated with the 1998 management

buyout and its investment in new businesses.



The group, bought out from Reed Elsevier in January 1998, reported 1999

pre-tax profits of only pounds 2.8 million for the year ending 30

September - down from pounds 144.5 million the previous year. The 1998

figure included a pounds 115 million profit on the disposal of New

Scientist.



Operating profits before exceptionals were down slightly from pounds

67.7 million to pounds 65.6 million.



Advertising revenue increased 6 per cent to pounds 120.2 million and

circulation revenue rose by 3.6 per cent to pounds 219.5 million.

However, the increases were enhanced by the acquisition of Link House in

late 1998 and other special factors without which revenues would have

grown by only 1.9 per cent. It is hoped that the creation of a central

sales unit will boost those advertising revenues in the coming year.



Despite the company’s serious debts, chairman David Arculus said he was

’confident the group had ended the year stronger than it had started

it’.



He insisted that plans to take the group public, and therefore relieve

it of much of the debt, were on schedule.



The group was divided into five companies in 1999, revealing IPC

Connect, the women’s weeklies division, as the biggest revenue

contributor with pounds 83 million of turnover. The combined circulation

of Connect’s six titles represented 39 per cent of the women’s weeklies

market in last year’s January to June ABCs.



During the year, IPC Electric - the online operation - was established

with pounds 25 million of new equity finance. IPC Electric is designed

to provide the technical infrastructure for all IPC’s existing websites

and is developing a range of new products. The three pillar brands of

the company’s internet presence are currently Nme.com, Unmissable.tv and

Beme.com, a new women’s online digital brand, which was announced

alongside the results. The move to establish a sizeable new-media

division is part of IPC’s attempt to reposition itself as a real force

in the digital age.



The group also announced that pounds 30 million is to be made available

for acquisitions. This is funded from cash generated within the group.

The money will be used to acquire profitable acquisitions.



IPC has also continued to invest in new magazines with the launch of

Later and New Eden, and with the relaunch of 60s style bible Nova in the

pipeline.



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