The Gleaner Company Ltd recorded a 104 per cent increase in its trading profit, moving from $115 million in 2006 to $235 million in 2007.

This performance was, however, affected by a reduction in employee benefit asset of $245 million and impairment loss of $201 million at its United Kingdom subsidiary, which resulted in a decline in pre-tax profit to $193 million for 2007. After-tax profit for the group was $98 million.

In filings with the Jamaica Stock Exchange last week, the media group, which reported net profits of $274 million in 2006, showed that its group sales climbed by just over 17 per cent to $4.2 billion in 2007, a jump of nearly $630 million.

Increase in costs

There was, however, an 18 per cent increase in costs due to increases in the price of raw material, exchange rates and reorganisation and restructuring expenditure. The filing also stated that the situation at GV Media, its UK subsidiary, had shown improvement during the last quarter of 2007.

Outside of the cost associated with the restructuring of GV Media, the biggest hike in expenses was in the group's cost of sales, which jumped $442 million, or approximately 20 per cent. The group was, however, able to contain the rise of its administrative expenses to $44 million, or six per cent - less than half the rate of inflation.

In 2007, the company credited only $65 million of profit from the employee benefit asset, a 79 per cent reduction to 2006.

Future economic benefits

Under International Financial Reporting Standard (IFRS) rules, such accounting profit arising from the company's pension scheme goes straight to the bottom line. The Gleaner's filing with the JSE explained, however, that this is not realised profit as its represents future economic benefits to be derived from the reduction in the company's contribution to the pension scheme.

The Gleaner Company Limited, established in 1834, offers the widest range of information products on the Jamaican media landscape. Newspaper products include - The Gleaner, The Sunday Gleaner, The Star, The Weekend Star, The Portmore Star, Outlook, Flair, Track & Pools, Hospitality Jamaica, Financial Gleaner, Children's Own, Youthlink, NA Star, NA Gleaner, UK Gleaner and The Voice (UK). The Gleaner also owns and operates go-jamaica.com, its website division, Independent Radio Company (Power 106 FM and Music 99 FM) and Sangster's Book Stores Ltd.