Group profits before tax at The Irish Times Ltd rose by 34.4 per cent to €18.7 million (£14.7 million) for 2000. Profits were boosted by an exceptional gain of €8.6 million (£6.8 million) on the sale of a premises on Burgh Quay in Dublin and a 132 per cent rise in income from investment to €3 million.

But operating profits were down 43.3 per cent to €7.2 million (£5.6 million) pulled back by a once-off charge of €6.3 million (£5 million) for special projects, losses at the Ireland.com Internet operation and cost increases. When the projects' cost is excluded, operating profits rose by 6.5 per cent.

The Irish Times newspaper drove group profits with good increases in advertising and circulation and the benefit of a cover-price increase for nine months of the year. Employees will benefit through a profitsharing scheme introduced last year.

Describing 2000 as "an exceptionally good year", managing director Mr Nick Chapman said the outlook was now "more uncertain". Advertising revenue growth started to slow in the first quarter, he said, warning that "we can no longer rely on growing revenue to absorb rising costs and any inefficiencies". Because of the Budget increase in employers' PRSI and in newsprint prices, Mr Chapman stressed the need to "manage the costs we can manage".

The €95 million (£75 million) four-year investment programme and partnership agreements with the unions were aimed at "ensuring our future" by reducing costs, increasing productivity and service quality and providing new revenue-generation opportunities, he said. This year some €58 million (£46 million) will be invested in editorial and commercial systems and print facilities following €27.7 million (£22 million) last year. The new Citywest print facility is on target to start production by the end of the year.

Investment this year is expected to wipe out the group's cash surplus. Chief financial officer Mr Liam Kavanagh said that from 2002 there would not be "the comfort" of cash reserves going forward and the group may have to borrow. But he added this was not an issue for a company with a strong cash-flow - net cash-flow from operating activities was up 7 per cent in 2000 to €20.3 million (£16.1 million).

The company is currently assessing whether to revamp its D'Olier Street headquarters or move to new premises. "Whatever we do about premises, it will have to be financed in a more imaginative way than sinking cash into it," Mr Chapman commented.

Group turnover was up 17.5 per cent at €110.7 million (£87.2 million) pushed ahead by an 18 per cent rise in advertising revenue and an 11.5 per cent increase in newspaper circulation revenue. Operating costs rose by 26.9 per cent to €103.5 million (£81.5 million). When special projects are excluded, operating costs increased by 19 per cent.

Staff costs were up 14 per cent to €45 million (£35.7 million) boosted by pay and pension increases and by an increase in staff numbers to 819 from 807. Fees, remuneration and pension contributions for executive and non-executive directors increased by 8 per cent to £2.7 million. Other cost increases included newsprint, carriage, investment in special editorial coverage of the US election and the Sydney Olympics and sales and marketing.

The special projects charge covered editorial developments during the year, including the new Saturday magazine, the Ticket on Wednesday, the expansion and redesign of the Saturday Weekend section and the EL supplement and the opening of a new bureau on Wall Street.

Operating profits at the newspaper were up 16 per cent to €15.3 million (£12.1 million) before the special project costs. Other group activities such as The Irish Field and subsidiaries Itronics, ICPC, and Irish Times Training Services performed well. But the new media Ireland.com operation cost the group some €4.4 million (£3.5 million), including trading losses of about €3.4 million (£2.7 million) and capital expenditure. The group said it will continue to invest in the website, which now has more than 20 million hits a month, focusing on developing revenue in the key recruitment and property areas.