20th Aug 1999

NZ Subsidary Results for Half Year Ended 30 June 1999

Exceptional items include a foreign exchange gain of $160.2 million on borrowings which more than offsets the foreign exchange loss of $114.6 million recorded last year.

Profit after tax and exceptional items was $160.2 million - compared to a deficit of $44.7 million for the six months to June 30, 1998.

WHH's Chairman Cameron O'Reilly said that result was very encouraging as advertising revenues began the year below the previous year, following the slow down in the New Zealand economy which progressively affected trading over the second six months of 1998 and continued into the first quarter of 1999.

Mr. O'Reilly said that trading profits were down in the first quarter but have since bounced back strongly in the second quarter and are continuing to strengthen.

Mr. O'Reilly said that the major cost reductions implemented at the end of 1998 were on track to deliver the full year savings as projected in March.

Mr. O'Reilly said that group sales revenue from continuing operations was flat for the first six months but revenues showed a considerable uplift over the last few months with current revenues being well up on 1998.

Leading economic indicators suggest the New Zealand recession is over and that the economy will grow by at least 2% to 3% per annum for the next couple of years as improvements to commodity prices, consumer confidence and the resurgence in Asian demand underpin a stronger recovery.

The Herald has continued to gain market share in the competitive national display advertising market and recent increases in market share in the motoring, employment and real estate sectors will enhance revenues in the second half.

Mr. O'Reilly said he was very heartened by the great strides which the company had made during the past six months and was confident that New Zealand's major events over the next six months (APEC, America's Cup, Rugby World Cup and the Millennium) would provide a real boost to overall confidence.

"With revenues trending well, costs markedly down and market shares rising, the company is very well-positioned for a strong second half as the New Zealand economy continues to pick-up.

"The restructuring programme launched by Wilson & Horton chief executive John Sanders and his team last October is proceeding swiftly.

"The transformation of the Herald's culture into one based on performance, efficiency and an aggressive approach to winning market share in all areas is bearing fruit and we are now moving into another phase in the newspaper's evolution."

In his comments on the operation, Wilson & Horton CEO, Mr. Sanders said: "As part of our focus on building circulation we announced last week, Herald Editor Gavin Ellis has been appointed Editor-in-Chief, and a new editor - reporting to Gavin - will be appointed. Gavin has done a tremendous job taking the Herald through its transformation from a traditional newspapers into a modern metropolitan daily of which we can all be proud".

Mr. Sanders drew attention to the great progress the regional & community newspaper division had made under Martin Simons in reducing the cost base in flat trading conditions. The significant cuts in expenses which will come through in the second half will ensure this division posts double digit growth for the full year.

Mr. Sanders also paid tribute to the work of the team in Hawkes Bay with the successful launch of Hawkes Bay Today in May of this year. Recognition of this launch was forthcoming in their recent win of "The Best of The Best" marketing award for newspapers in the Asia Pacific Area.

All divisions of Wilson & Horton were now performing well, Mr. Saunders said. Gains with new major accounts for the commercial printing operation will have a noticeable impact in the second half of 1999. The benefits are now flowing from recent investments in the Security Plastics division for it to handle the new New Zealand drivers license contract.

Mr. Sanders said he was also very pleased with the growth posted by the magazine and UBD and street mapping businesses which had performed exceptionally well in the first half of 1999, growth which he highlighted looked like continuing for the full year.

Mr. Sanders drew attention to the importance New Media developments will play in the coming years. He said: "Wilson & Horton have positioned themselves as the number one content provider currently on the web in New Zealand and intend to continue to invest to ensure this number one position remains with us.

"We are staying very close to current on-line trends, in particular developments with classified on-line and have some exciting plans in place to grow our New Media business," he said.

WHH is a wholly owned subsidiary of Independent News & Media PLC of Ireland ("INP"). WHH's listed securities are cumulative exchangeable preference shares exchangeable into INP's ordinary shares and therefore the underlying value of these shares is determined by the performance of the INP group as a whole. Under the terms of the cumulative exchangeable preference shares, upon maturity in 2003, the preference shareholders can elect to exchange one preference share for either $8.00 cash, or, one INP ordinary share.

As at 19 August, 1999, Independent News & Media PLC's ordinary shares were quoted on the Dublin Stock Exchange at Euro 4.30 (NZ$8.50).

Ends. Friday, 20th August 1999 For Reference: Liam Healy Chief Executive Independent News & Media PLC Tel: +353 - 1 - 475 8432

Jim Milton 

Murray Consultants Limited Tel: +353 - 1 - 661 4666