Trinity Reports Profit Increase As Cost Cuts Continue

Newspaper publisher, Trinity Mirror, has announced a 25% increase in its annual profits, despite the continued circulation decline of its flagship publication, the Daily Mirror.

In a statement made this morning to the London Stock Exchange, Trinity revealed a 6.6% rise in revenue for 2004, taking the group’s total to £1.1 billion. The company reported that advertising revenue for Trinity’s regional newspaper sector increased by 6% from £394 million to £418.8 million in 2004, while circulation revenues also rose by 6% to £80.7 million.

Cost cutting initiatives across the group are reported to continue, rising from £23 million in 2003 and £28 million in 2004, to £35 million during the coming year.

Advertising revenues increased by 3.6% compared to 2003, despite a decrease in sales across Trinity’s national portfolio. Sly Bailey, chief executive of the group, attributed this drop to the continuing affects of the alleged Iraqi prisoner abuse pictures published by the company’s flagship Daily Mirror newspaper last May.

Commenting on the results, Bailey said: “The results represent the effect of the first full year of our performance based strategy Stabilise Revitalise Growth. They are also a testament to the highly motivated and talented people who make up Trinity Mirror and have refocused and reprioritised their efforts. This is absolutely a team effort and together we have delivered all of the financial targets we promised”.

Sir Victor Blank, chairman of Trinity Mirror added: “The management team is focussed on growth, both organically from within our existing business, and by reviewing the opportunities for acquisition. We have both the talent and resources to achieve this and in returning capital to shareholders, we will not be inhibiting our plans for growth.”

Bailey also stated in a conference call with journalists this morning that Trinity would not cut the cover price of the Daily Mirror to stem the paper’s declining readership. She said: “There was significant price cutting in the market in 2004 and that will continue in 2005, but this is not something we will do.”

She added: “We will not make unprofitable or unsustainable investments for short-term circulation gains. We’re not going to rent readers,” explaining that the company would not echo the aggressive marketing and promotional activities employed by rival publishers to win readers, shunning giveaway promotions such as free DVDs and CDs.

However, both the Daily and Sunday Mirror have seen their circulations decline sharply in recent months, with the weekday paper losing 8.8% of its total year on year, while its Sunday sister title lost 0.1% over the same period. The papers now command circulations of 1.7 million and 1.6 million respectively, and, although Bailey denied that the publisher had received any takeover offers, she declined to rule out the sale of the Mirror titles. “We are here to create value for our shareholders and that is something that the board is always focused on,” she said.

Trinity has launched two new local newspapers in the past few weeks, targeting the Midlands with the Kenilworth Citizen and Solihull & Warwickshire Guardian.

The Kenilworth Citizen will reach over 9,000 homes in the Kenilworth area of the West Midlands, achieving penetration of 87% (see Trinity Mirror Launches 40th Midlands Newspaper), while the Solihull & Warwickshire Guardian will provide local residents with an intelligent round up of the week’s news every Thursday (see Trinity Targets Affluent Midlanders With Paid-For Weekly).

Trinity Mirror: 020 7293 3000www.trinitymirrorplc.uk

Recent Newspaper Stories from NewsLine NRS National Newspaper Round-Up Livingstone Seeks Increased Newspaper Revenue From Tube Desmond Ponders Relaunching Express As Free-Sheet

Subscribers can access ten years of media news and analysis in the Archive