INL says newspaper merger to cost $8.5 mln

By NZPA

Tuesday 16th July 2002

Media group Independent Newspapers Ltd (INL) said today it will book a one-off charge of $8.4 million against its 2001/2002 results following the merger of Wellington dailies The Dominion and The Evening Post.

R edundancy payments to the 84 staff that lost their jobs in the merger make up the lion's share of that charge, INL chief executive Tom Mockridge said.

Costs of terminating afternoon distribution, design work on the new paper and changes to signage are also included.

The non-recurring expense will affect the results for the year ending June 2002 rather than 2003 because the company decided on the merger and advised staff ahead of the June 30 balance date, INL said.

Costs associated with the new paper, including launch promotions, will be charged to fiscal 2003 and no expenses will be capitalised.

The new Dominion Post's circulation has exceeded 100,000 every day since its debut on July 8, INL said. More than 90 percent of Evening Post subscribers have converted to the new paper and advertising bookings are ahead of expectations.

Before the merger, the Evening Post had a circulation of about 54,000, while The Dominion's most recent audited circulation figure was 70,565.

Mr Mockridge said indications to date are that the merger will be at least earnings neutral for INL in fiscal 2003 when compared with fiscal 2002 and earnings positive in fiscal 2004 and beyond.

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