Profits Down At Trinity, But Above Expectations
Pre-tax profit at regional and national newspaper publisher, Trinity Mirror, was down by 9.7% at £80.9 million for the six months to 1 July 2001, but nevertheless ahead of expectations.
Strong advertising revenue growth in Q1 was offset by a deterioration of advertising in Q2, according to analysts at ABN Amro. Ad growth came in at 4.7%, driven by strong regional and classifieds performances. The three national titles – the Mirror, Sunday Mirror and Sunday People – showed a 2.3% decline in ad revenue for the half. A 7.5% increase in the first quarter was followed by a decline of 2.9% in the second.
Increases of 11.6% and 6.0% in retail and classified advertising respectively were offset by sharp declines in motors, finance, travel and FMCG display advertising during Q2. Growth of 2.0% is anticipated in July.
Circulation revenue at the nationals dropped by 3.4% to £109.2 million. Despite this circulation of the Mirror has been steadily improving, particularly since the move of M magazine to Saturdays. The Mirror‘s circulation improved year on year from a decline of 5.3% to 1.6%.
A tough economic and competitive local market meant that revenue at the Scottish national newspaper operations fell by 1.5% leading to a fall of 6.4% in operating profit (to £11.7 million), the company said.
The Group’s regional newspapers business, including the three Metro titles, achieved a 10.9% increase in revenue (from £246.6 million to £273.4 million) and 0.8% increase in operating profit (from £64.8 million to £65.3 million). On a like-for-like basis, adjusting for the effects of the integration of Belfast Telegraph Newspapers and Southnews, revenue grew by 4.4% (from £262.0 million to £273.4 million) and operating profit increased 4.3% (from £62.6 million to £65.3 million).
Like for like advertising revenues at the regional titles grew by 6.5% to £212.1 million. Again, growth was stronger in the first quarter than the second and was driven primarily by recruitment advertising.
A strategic review of all of Trinity Mirror’s operations has been set in motion by its new CEO of newspapers, John Sinyor. This is expected to yield cost savings of £9 million this year, £25 million in 2002 and £35 million by 2003.
As part of this review Trinity is seeking to properly integrate all of its various regional newspaper divisions which, according to ABN, have remained effectively autonomous if under an umbrella name, even since the merger of Trinity and Mirror Group.
| Advertising growth assumptions | ||||||
| 2001 | 2002 | |||||
| Before | After | % Point Change | Before | After | % Point Change | |
| Regionals | ||||||
| display | 0.0 | 0.0 | 0.0 | 2.5 | 2.5 | 0.0 |
| classified | 4.5 | 4.5 | 0.0 | 3.8 | -4.0 | -7.8 |
| Total Regional | 3.0 | 3.0 | 0.0 | 3.3 | -1.9 | -5.2 |
| UK Nationals | ||||||
| display | 0.5 | 0.5 | 0.0 | 3.0 | 2.5 | -0.5 |
| classified | 5.0 | 3.0 | -2.0 | 4.3 | -2.5 | -6.8 |
| Total UK Nationals | 1.2 | 0.9 | -0.3 | 3.2 | -1.8 | -1.4 |
| Scottish Nationals | ||||||
| display | -6.3 | -6.3 | 0.0 | 2.0 | 1.5 | -0.5 |
| classified | -2.1 | -3.0 | -0.9 | 2.0 | -3.0 | -5.0 |
| Total Scotland | -4.5 | -4.9 | -0.4 | 2.0 | -0.5 | -2.5 |
| Source: ABN Amro estimates | ||||||
At 10:30 this morning shares in Trinity Mirror were down by 5p at 382½p.
