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
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
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