A decision to shift its debts into New Zealand dollars cost Wilson & Horton Holdings #31 million (£39.4 million) last year and drove the Independent News & Media subsidiary into the red.

Losses before tax at the company, which publishes The New Zealand Herald, were #821,000 in the year to December 2000 compared to profits of #106.6 million in the year to December 1999.

The 2000 figure included an exceptional foreign exchange loss of #17 million associated with the decision to switch foreign denominated debt into New Zealand currency. The move also pushed up the group's interest bill by more than #15 million. The decision to re-organise the debt was taken to ensure "that most of the adverse currency movements which had been a feature of the company's results in past years, are now eliminated", according to the company.

The 1999 figures by comparison were boosted by an exceptional gain of #78 million due to favourable exchange rate movements. The company yesterday focused on operating profits which were up 12.3 per cent on the previous year at #47.7 million. The increase was delivered on operating revenue growth of 3.9 per cent, said Mr Jim Parkinson, the finance director on Independent News & Media. The low level of revenue reflected a flattening in the second half of the year after an unseasonably strong first half.

Turnover at the new media division grew from #200,000 to #551,000 while losses went from #329,000 to #1.8 million. "Following a year of prudent investment to build a leading Internet presence, Wilson & Horton took the lead in late 2000 in rationalising expenses in response to the rapidly changing market environment," the company said yesterday.