Digital is providing the only area of revenue growth at Trinity Mirror as the group releases its latest trading update showing a continued decline in print.
The regional news publisher said it expects overall print revenue to decline by 12 per cent against a growth of 11 per cent in digital in the third quarter of this year.
Print advertising is expected to fall by 21 per cent and circulation by 6 per cent, but digital display advertising and transactional revenue is to climb by 24 per cent, the company has said.
It put the rise down to the continued growth in digital audiences despite classified digital revenue still being “under pressure” amid a “challenging” trading environment.
The company also revealed it had made “structural cost savings” of £20m for the year, £5m ahead of its initial target.
A spokesperson said: “Although the trading environment has remained challenging during the third quarter of the year, our continued focus on growing digital revenue and driving efficiencies provides the Board with confidence that profit for the year will be in line with market expectations.”
During the third quarter, the publisher said it had:
- Acquired 1.6 million shares for £1.5 million under the £10 million share repurchase programme announced in August
- Completed the sale of Rippleffect, a digital marketing services agency for a cash consideration of £2 million. (The business generated revenue of £5.7 million in 2015 and £3.4 million prior to its disposal in 2016 and will have no impact on profits for the year)
- Handed back four of the eight regional Metro franchises it operates to Daily Mail and General Trust with effect from 1 January 2017. (These titles are expected to generate revenue of about £10 million in 2016 with a minimal contribution to profits.)
Group revenue on a like for like basis is expected to fall by 9 per cent in the third quarter compared to a decline of 8 per cent in the first half.
Joshua Raymond, market analyst at brokerage XTB said: “The positive here is digital display growth of 21 per cent, which shows the firm is moving in the direction advertisers demand, and an additional £5m seen in cost cutting initiatives.
“Nevertheless, Trinity Mirror’s share price remains under pressure having lost more than 20p in the last month alone.
“Whilst these numbers will not dramatically change the picture for investors, it does show that the battle the firm has to adapt to the fast move to digital advertising remains somewhat slow and frustrating.”