Trinity Mirror reports 40 per cent drop in profits

  • News of the World closure prompts 2.2 per cent rise in circulation revenue in the nationals division
  • Publishers launched new deals website ‘happli’
  • Profit on nationals down 12 per cent

Trinity Mirror has reported a 40 per cent fall in operating profit to £92.4m on revenue down 2 per cent to £747m in the 2011 financial year.

Its nationals division saw revenue fall 1.7 per cent £453m and operating profit drop 12 per cent to £83.1m

Trinity said the revenue drop was ‘significantly improved’from the fall of 6.2 per cent in 2010 and ‘reflects an increase of 3.5 per cent in the second half compared to a decline of 6.7 per cent in the first half”.

Advertising income in the nationals division was down 11.2 per cent to £135.1m but circulation revenue rose 2.2 per cent to £256.6m on the back of increases in Sunday Mirror and People sales following the closure of the News of the World in July.

Circulation revenue rose 27.4 per cent for the Sunday Mirror and 23.9 per cent for The People, and dropped 2 per cent drop for the Sunday Mail. Circulation revenue for the Scottish national titles, including the Daily Record, fell by 6.9 per cent.

Operating profit at its regional press division fell 16 per cent to £36.5m on revenue down 2.3 per cent to £293.6m.

Trinity Mirror group digital revenue increased by 1.3 per cent, or £0.5m, from £37.1m to £37.6m digital revenue fell by 1.1 per cent to £34.5m.

Figures released by the publisher this morning show that on an adjusted basis – underlying performance of the business – operating profiting was down 15 per cent to £104.5m, while pre-tax profit was down 40 per cent to £74.4m, or 15 per cent on an adjusted basis.

‘Cyclical advertising revenues expected to return to growth’

Trinity said in that in response to ‘cyclical market pressures’it had undertaken a series of measures to support revenue and profitability including savings of £25m, and that ‘without the impact of £22m of additional costs due to newsprint price increases adjusted operating profit would have increased year on year”.

Net debt has been cut by £44.7 million to £221.2 million, and the company announced a new £110m bank facility through to August 2015. It is targeting a further £15m of structural cost savings in 2012.

Trinity has also announced the launch of a new deals website called ‘happli’, which it expects to deliver revenues of £20m by 2014.

Happli, which has already been piloted in Manchester and Newcastle, will today be rolled out in Liverpool, Glasgow and Edinburgh, with plans to launch in a further 20 cities by the end of 2012.

By early 2014 it expects local deals to be available in more than 50 cities.

The company also noted its December 2012 acquisition of Communicator Corp, which alongside its existing business Rippleffect, anticipates revenues in excess of £10m in 2012.

Trinity Mirror chief executive Sly Bailey said its investment priorities ‘are focused on diversifying our revenues in both B2B and B2C sectors which complement our existing strengths: digital marketing services, developing existing digital brands by increasing audience engagement and monetisation, launching new digital products across multiple platforms and a significant launch of a new brand happli into the strategically important daily deals market”.

She added: ‘The advertising market has been impacted by both cyclical pressures due to the very weak economy and challenges driven by media fragmentation.

‘However, our most cyclical advertising revenues are expected to return to growth when the economic environment stabilises with an improvement in both consumer and corporate confidence.

‘In addition, we are well placed to take advantage of the structural changes in our markets through the strength of our digital brands, both nationally and regionally and in key sectors such as recruitment.”

  • To contact the Press Gazette newsdesk call 020 7936 6433 or email pged@pressgazette.co.uk

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