Interactive Publishing has released results for the six months to 31st December showing a pre-tax profit of £132,231, up from a loss of £83,772 in 2008. Turnover rose by 14% to £3.75 million, and diluted earnings per share of 0.07p were reported, from a loss per share of 0.05p in 2008. A slight increase of 4% was recorded in the cost of sales, which rose to £2.78 million. No balance sheet was released with the results but we note that finance costs were £5,553, from £22,874 in the year to June 2009.

Highlights of the half included the acquisition of Marine Media, a business which publishes sailing magazine, Sailing Today. In addition, subsidiary, Trojan Publishing, agreed to the production and distribution of the adult magazines published by Paul Raymond International, which include top shelf favourites such as Razzle, Mayfair and Escort. Interactive Publishing also acquired hair and beauty publisher Scissorhands Media.

The group commented that it was focusing heavily on its consumer brands while also attempting to improve revenues and profitability in the adult range. The company has also has sought to develop social networking platforms for its key brands that will build on the magazine user’s experience and also increase brand awareness.

Since its IPO just over two years ago the firm’s shares have fallen from 3.5p to a mid-price of 1.125p, giving it a current market capitalisation of £1.75 million. The shift into profit is a welcome move and all the more impressive considering the difficult time that the printed media industry had in 2009. While there are ongoing concerns surrounding print media the company’s online and brand enhancement strategies seem to be working well. If the first half performance is repeated in the second then the shares will trade on a multiple of around 8 times, a rating which we think looks reasonable considering the recent performance and the company’s growth by acquisition strategy. Speculative buy.