Trinity Mirror’s cost-cutting enabled it to edge up profit margins in 2005 despite reduced turnover.
Jobs cuts across the regional and national titles helped find annual cost savings of £40 million. Overall revenue dropped 1.3 per cent to £1,112.8 million but operating profit edged up by 1.7 per cent to £250.2 million making a profit margin of 22.5 per cent (21.8).
Chief executive Sly Bailey revealed that an £83 million investment in presses means the national titles will be in full colour by 2008 – enabling them to keep up with the Sun and News of the World which are expected to make the colour switch around the same time.
She revealed that after challenging advertising conditions in 2005, with recruitment advertising particularly hard hit, the advertising market is expected to “remain difficult” this year. This means more cutbacks are planned to maintain the bottom line and she said another £15 million of savings will have to be found in 2006.
Trinity Mirror’s 240 local and regional continues to be by far the company’s biggest source of profits. Revenue dipped 1.6 per cent to £509.5 million but cost-cutting meant that profit increased 0.9 per cent to £149.5 million. The profit margin increased from 27.7 per cent to 28.2 per cent.
Both the free daily Metro joint ventures with Associated Newspapers and the regional newspaper websites delivered comparitively small profits, of £1.9 million and £1.8 million respectively.
Cost-cutting also meant profits increased at the national titles despite lower revenues. The Daily Mirror, Sunday Mirror and People earned revenue down 2.9 per cent to £388.3 million but profit increased 2.4 per cent to 67.9 million.
The national newspaper market was described in the preliminary results as “extremely challenging”. Circulation of the Daily Mirror dropped 5.5 per cent over 2005 but Trinity Mirror claimed that “editorial investment to create a more appealing product coupled with investment in product availability” had slowed the rate of decline from 7.7 per cent in the first half to 3.4 per cent in the second half.
The Racing Post continued to be highly profitable in 2005 with revenue up 5.2 per cent to £50.6 million, helped by the launch of a Sunday edition. Operating profit increased slightly from £17.3 million to £17.4 million making a profit margin even greater than the regionals division at 34 per cent.
However this year the Racing Post could find trading tougher with the launch of rival national gambling daily newspaper The Sportsman expected to launch this month.