Trinity Mirror Review Sheds NI Titles, Retains Nationals

The division comprises the Derry Journal and Century Press & Publishing businesses which produce six titles in Northern Ireland and three titles in the north of the Republic of Ireland. The titles are said to be performing strongly, but that following the review of its business, Trinity has concluded that the they are non-core to its operations.

Announcing both Trinity Mirror’s interim financial results and the results of her wide-ranging review, chief executive Sly Bailey also ruled out the possibility of demerging its regional and national newspapers.

Some reports have suggested that certain investors are keen to remove the Daily Mirror-led national titles from the business and concentrate on the more profitable regional papers. However, as expected (see Trinity Mirror Rules Out Newspaper Sales), Sly Bailey has decided against such a move, saying:

“My vision for Trinity Mirror is to unlock its hidden potential for growth. The actions I am putting in place will transform our business so that its value as a whole is undeniably more than the sum of the parts.”

In order to unearth this hidden potential, Bailey is proposing that the national papers ‘focus on the basics of publishing’ to improve profitability. This will include a ‘sharper positioning of individual titles’, she said.

Bailey’s review found that although the merger of Mirror Group and Trinity took place nearly four years ago, the degree of integration and economies of scale between the businesses remains limited. The three phase restructuring plan that will now be set in place (stabilise, revitalise and grow) will result in the loss of around 550 jobs over the next couple of years.

The programme is expected to deliver £25 million annualised cost savings in 2005 of which £4 million will be achieved in 2003 and an incremental £16 million in 2004.

First half results Pre-tax profits at the group rose by 2.6% to £80.4 million in H1, whilst turnover dipped very slightly, by 0.4% to £551.5 million.

Advertising revenues at the regionals were more or less flat year on year, rising just 0.6% to £204.1 million. Within this, the regional papers excluding the Metro titles saw a rise of 0.3%, whilst the Metros jumped by 11.4%.

The second quarter was stronger than the first for the regional papers, moving from a slightly negative trend to a slightly positive one respectively.

Ad revenues at Trinity Mirror’s national newspapers fell by 0.7% in the half to £96.4 million. This is not a bad performance in markets that are still weak. The UK nationals saw flat growth in advertising in the period, with a 3.0% rise in Q1 offset by a 2.9% decline in Q2.

Outlook Trinity believes that the uncertain economic and advertising environment will continue for the remainder of this year. Despite this, it expects cost reductions and the new strategy to delivery a satisfactory outcome for the full year.

Shares in Trinity Mirror were up 1.4% at 479p following this morning’s announcement.