Trinity Mirror Misses Out On Christmas Bonus
The UK’s largest newspaper publisher, Trinity Mirror, this morning confirmed that advertising conditions have continued to deteriorate since 11 September, with national revenue declines of 10.1% and 20.7% in October and November respectively. The company says that it expects December’s figures to be much the same, losing the company the traditional Christmas boost to ad revenues.
National newspapers For the five to seven days immediately after 11 September most advertising within the national titles was removed, mainly at the request of advertisers. This resulted in a decline for the third quarter of 1.3%. Whilst display advertising has been badly affected, classified advertising within the national titles continues to achieve year-on-year growth, said the statement.
The Scottish national titles, following a reasonable performance in Q3, with a decline in advertising revenues of only 1.9% (compared to 5.9% in Q2), have been similarly impacted since 11 September. October and November produced declines of 13.0% and 17.3% respectively and December is expected to deliver a decline in line with October.
Regional newspapers Advertising revenues within Trinity’s regional titles – excluding revenue from Belfast Telegraph Newspapers (sold 30 July 2000) and including Southnews revenues throughout 2000 (acquired 28 November 2000) – grew by 2.0% in Q3, with recruitment advertising growth of 8.5%. During this period, recruitment advertising in all areas other than the South East remained very strong, the company said.
The South East saw a decline in recruitment advertising as employment conditions in the Thames Valley area reacted to the broader downturn in the high tech and IT industries.
Cost reduction Trinity Mirror says that during the past five months, it has made good progress in implementing cost reduction measures, as outlined earlier in the year (see Profits Down At Trinity, But Above Expectations). Notably, investment in digital media activities has been further reduced to approximately £10 million per annum from the beginning of 2002.
The company also anticipates a fall in newsprint prices in 2002, as intimated by analysts at ABN Amro (see Forecasts).
Comment ABN Amro believes that Trinity’s revenues are more robust than other UK newspaper publishers and that the group has the least exposure to the weakest advertising sectors such as finance, travel and executive recruitment.
The broker also expects newsprint costs to fall by around 5% next year, given a knock-on effect from the US, where print costs have already dropped by 16%.
At 11:00am today shares in Trinity Mirror were down 11p at 411½p, following the statement.
