Trinity Mirror has confirmed it is looking to cut costs by a further £7m, after the company announced flat revenues and falling profits in its regional newspaper division.
The group, which publishes the Daily and Sunday Mirror, The People, Daily Record and around 150 regional papers, said it was remaining cautious about its performance in the coming year. It achieved £13m in cost savings in 2007 and said it hoped to increase this to £20m by the end of this year.
Announcing its end-of-year results this morning, Trinity posted a below-inflation increase in overall like-for-like revenues – up 1.6 per cent to £932.3m. Operating profit rose 3.6 per cent to £186.1m.
Regional revenues remained stable at £444.7m, but profits fell 4.6 per cent to £109m. The group is hoping to increase circulation revenue in the coming year with what it described as a “little and often” approach to cover price rises.
National newspaper revenue rose 3.2 per cent year on year to £487.6m, but significant cost savings allowed the division to increase its operating profit by 17.6 per cent to £94.3m.
The group acknowledged there was an overall decline in national newspaper circulations year on year, and criticised rival national newspaper publishers for “distorting” their sales figures with price cuts and marketing, saying it remained committed to publishing its titles at full price.
The disposal of Trinity Mirror’s sports division and seven sub-regional newspaper groups in the south of England – including titles such as the South London Press and Croydon Advertiser – raised £263m for the company, in a move which the company said had made its portfolio more “resilient”.
Chief executive Sly Bailey said: “Although we are cautious about trading in 2008, the board anticipates a satisfactory performance for the year given the continued implementation of the group’s strategy, ongoing focus on cost control and resilient cash flows.”
Despite a “challenging advertising environment”, the company managed to increase its group-wide profit margin to 20 per cent – up from 19.6 per cent in 2006.
Digital revenues across the group increased 35.6 per cent year on year to £34.3m – and now represent 6.7 per cent of total advertising revenue. Trinity Mirror spent £13.1m on digital acquisitions, including TotallyLegal.com in May and property business Globespan Media in November.
The regional newspaper ABCs for the second half of 2007 are released today at noon.