Newspaper publisher, Trinity Mirror, has revealed a drop in turnover for the 52 weeks to January 1st 2006, dipping by 1.3% like for like to £1.12 billion after a slowdown in the UK economy resulted in a fall in marketing spend.
Despite this decline, Trinity reported a year on year increase of 5.9% in pre-tax profits, reaching £290.9 million over the period.
Looking towards 2006 the group said there was “as yet no sign of improvement in its traditional advertising markets”. The new year started badly for the publisher, with Vijay Vaghela, finance director for Trinity Mirror revealing that ad sales had declined by 13.5% in January and February 2006.
For the 2006 as a whole, Trinity is expecting respective falls of 3.5% and 5% in its regional and national advertising revenues.
Weakness in the UK economy and the continued shift of classified adspend onto the internet has resulted in a downturn in advertising revenues in the newspaper industry.
Trinity warned investors of the expected poor performance in media in 2006 at the end of last year saying: “The downward trend in the advertising market continues. There will be inflationary and other cost pressures in 2006, including higher newsprint prices (see Trinity Warns Of Downward Slide For Print Ads).”
Trinity also outlined plans for cost savings of £15 million next year, although analysts were this morning described as “sceptical” over the company’s ability to deliver, expecting to cut profit forecasts following the downbeat trading update.
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